Realization of auditors, Business Law and Ethics

Assignment Help:

Realization of Auditors:

it is a mere truism to say that the value of loans and securities depends on their realization.  We were told that a statement to that effect, is so unusual in an auditor's certificate that the mere presence of those words was enough to excite suspicion.  But, as already stated, the duty of an auditor might infer from an unusual statement that something was seriously wrong, it with no means follows that ordinary people would have their suspicion aroused by a similar statement, whether as in this case, there its language expresses no more than any ordinary person would infer without.....the balance sheet and profit and loss account being true and correct in the sense that they were in accordance with the books.  But they were, nevertheless, entirely misleading, and misrepresented the real position of the company.  Under these circumstances I am compelled to hold that Mr. Theobald failed to discharge his duty to the shareholders...  Possibly he did not realize the extent of his duty to the shareholders as distinguished from the directors, and he unfortunately consented to leave the Chairman to explain the true state of the company to the shareholders instead of doing so himself. 

The fact, however, remains, and cannot be got over, that the balance sheet and certificate of February 1892 did not show the true position of the company at the end of 1891, and that this was owing to the omission by the auditor to lay before the shareholders the material information which he had obtained in the course of his employment as auditor of the company, and to which he called the attention of the directors....  Where did the money come from with which the dividends were paid?  The money came from cash at the bankers or in hand; but this cash could not be properly treated as profit, and the directors and auditors knew this perfectly well...."


Related Discussions:- Realization of auditors

Explain the jurisdiction, JURISDICTION  According to Peter Stephen Du P...

JURISDICTION  According to Peter Stephen Du Ponceau, an international lawyer from Philadelphia, Jurisdiction, in its most general sense means; "The power to make, declare, o

Fraudulent preference, Fraudulent Preference: Under s.312, any disposi...

Fraudulent Preference: Under s.312, any disposition of the company's property and any creation of a charge, fixed or floating, effected during the period of six months before

Increasing the risk rating of building and construction, Q. Increasing the ...

Q. Increasing the risk rating of building and construction? Stakeholders indicated that there is a significant risk of phoenix activity in the building and construction industr

Statutory safeguard - non-accepting shareholders, Statutory safeguard - Non...

Statutory safeguard - Non-accepting shareholders: The non-accepting shareholders have a further statutory safeguard.  Company A is not obliged to serve notice of intention to

restraint of trade clause, a) Explain two scenarios in which a restraint o...

a) Explain two scenarios in which a restraint of trade clause would typically be used. b) Suppose your employer wanted to include a restraint of trade clause in your employment

Stolen goods - sales of goods, Stolen Goods - Sales of Goods Where goo...

Stolen Goods - Sales of Goods Where goods have been stolen and had been the thief has been prosecuted and convicted, such the property in the goods revests in like original ow

Fraud on the minority, Fraud on the minority: The exception of "fraud ...

Fraud on the minority: The exception of "fraud on the minority" depends, whereas the company is defrauded, on "wrongdoer control," i.e. the individual shareholder must show th

Fraud or improper conduct, Fraud or improper conduct: English courts h...

Fraud or improper conduct: English courts have intervened on numerous occasions and lifted the veil of incorporation in order to circumvent a fraudulent or improper design by

When is an employer not vicariously liable, When is an employer not vicario...

When is an employer not vicariously liable? An employer is not vicariously liable when: a. Worker is doing something in working hours as of a personal nature. b. She or h

Types of transaction - reconstructions , Types of transaction - reconstruct...

Types of transaction - reconstructions: It will be seen that methods (a) and (b) relate to specific types of transaction.  They can only be used in those transactions.  The fl

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd