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Misfeasance by the auditors:
However it is not sufficient to describe that the frauds must have been detected whether the entries in the books had been put mutually in a way which never occurred to any one before suspicion was aroused. The question is where, no suspicion of anything wrong being entertained, there was a want of reasonable care on the part of the auditors in relying on the returns made through a competent and trusted expert relating to matters on where as information from such a person was essential. So I can't think there was. The manager had no apparent conflict between his his duty and interest also. Therefore his position was not similar to that of a cashier who was to account for the cash that he receives, and other, whose own account of his receipts and payments could not reasonably be taken by an auditor without further inquiry.
LOPES,LJ.:" ... (1) What is a misfeasance within the way of S.324(1)?
Therefore now 'Have the auditors in the circumstances of this case committed a misfeasance?' Since it has been held that an auditor is an officer within the meaning of the Section as:- like 'In RE LONDON AND GENERAL BANK'. So but has there been any misfeasance by the auditors? Thus now this depends upon what meaning is to be assigned to the word "misfeasance" as used in this section. The learned moderator or judge in the court below held that misfeasance covered any misconduct by an officer of the company as such for which such officer might have been sued apart from the section. In my judgement this is too wide.
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