Reports and balance sheets, Business Law and Ethics

Reports and balance sheets:

The reports and balance sheets for the years ending June 30, 1925, and, June 30, 1926, were signed by two directors.  The reports annexed to these balance sheets were signed by the auditors.  The question was:  What was the duty of auditors  in respect of these two balance sheets?

The auditors merely sent the reports and balance sheets to the secretary of the company, and they never got beyond the secretary.  The directors never called a general meeting to consider theses balance sheets and reports.

By S.162 (1) of the Companies Act "The auditors shall make a report to the members on the accounts examined through them, and on every balance sheet laid just before  the company in general meeting during their,  office's tenure......"

                   BENNET, J:

                   "....Does the statute impose on the auditors the duty of making their report to every member of the company?

Now if you give the words their plain meaning it would seem that that obligation is imposed on them.  But when you begin to reflect on the question it cannot, I think, have been the intention of the legislators to impose that duty on the auditors and it certainly has never been the practice, since the obligation has been imposed, for auditors themselves to send their reports to every member of the company...  I do not think it possible to hold that the words "the members"....  corresponding   "all the members".

Posted Date: 1/15/2013 2:41:32 AM | Location : United States

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