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CHAPTER 16
AUDITORS

The duty of the auditors as to the value to be placed on the assets is discussed on the previous chapter. Apart from complying with the requirements of the Eighth Schedule, if the auditors have formed an opinion that the assets are over-valued, they are bound to report it to the shareholders.
In re London and General Bank (No. 2), [1895] 2 Ch. 673. Auditors made a confidential report to the directors, calling their attention to the fact that the security for loans was insufficient, and that there was a difficulty in realisation. They also reported that in their opinion no dividend should be paid for the year. In their report to the shareholders, however, they merely said that the value of the assets was dependent upon realisation. A dividend of 7 per cent. was declared out of capital. Held, the
auditors were guilty of misfeasance and liable to make good the dividend paid.
As to current assets, they are entitled to take the values of stocks and work in progress from the manager or other responsible official of the company, unless they have any reason to suppose they are inaccurate.
In re Kingston Cotton Mill Co. (No. 2), [1896] 2 Ch. 279. The auditors accepted the certificate of J., the manager, as to the value of the stock. This was grossly excessive, as a result of which dividends were paid out of capital. Had the auditors compared the amount of stock at the beginning of the year with the purchases and sales during the year, they would have been put on enquiry, but they did not do so.
Held, the auditors were not liable, as they were entitled to rely on J.'s certificate.
Auditors cannot be relieved from liability for negligence by any provision in the articles (s. 205), but they can apply to the Court for relief (s. 448).(13)
The auditors can plead the statutes of limitation after six years. (14)
INVESTIGATION
On the application of not less than two hundred members or of members holding one-tenth of the shares issued, the Board of Trade may appoint inspectors to investigate the affairs of the company and to report on them (s. 164). The application must be supported by evidence showing that the applicants have good reason for requiring the investigation. Security for the costs of the inquiry not exceeding £100 may be required by the Board of Trade. In addition, the Board must appoint inspectors if the company by special resolution or the Court by order declares that an investigation ought to be made and may, on its own initiative, appoint inspectors in suspected cases of

13 See ante, p. 130.
14 Leeds Estate Co. v. Shepherd (1887), 36 Ch. D. 787.

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where is HTML where is HEAD where is TITLE The duty of what is auditors as to what is value to be placed on what is assets is discussed on what is previous chapter. Apart from complying with what is requirements of what is Eighth Schedule, if what is auditors have formed an opinion that what is assets are over-valued, they are bound to report it to what is shareholders. In re London and General Bank (No. 2), [1895] 2 Ch. 673. Auditors made a confidential report to what is directors, calling their attention to what is fact that what is security for loans was insufficient, and that there was a difficulty in realisation. They also reported that in their opinion no dividend should be paid for what is year. In their report to what is shareholders, however, they merely said that what is value of what is assets was dependent upon realisation. A dividend of 7 per cent. was declared out of capital. Held, what is auditors were guilty of misfeasance and liable to make good what is dividend paid. As to current assets, they are entitled to take what is values of stocks and work in progress from what is manager or other responsible official of what is company, unless they have any reason to suppose they are inaccurate. In re Kingston Cotton Mill Co. (No. 2), [1896] 2 Ch. 279. what is auditors accepted what is certificate of J., what is manager, as to what is value of what is stock. This was grossly excessive, as a result of which dividends were paid out of capital. Had what is auditors compared what is amount of stock at what is beginning of what is year with what is purchases and sales during what is year, they would have been put on enquiry, but they did not do so. Held, what is auditors were not liable, as they were entitled to rely on J.'s certificate. Auditors cannot be relieved from liability for negligence by any provision in what is articles (s. 205), but they can apply to what is Court for relief (s. 448).(13) what is auditors can plead what is statutes of limitation after six years. (14) INVESTIGATION On what is application of not less than two hundred members or of members holding one-tenth of what is shares issued, what is Board of Trade may appoint inspectors to investigate what is affairs of what is company and to report on them (s. 164). what is application must be supported by evidence showing that what is applicants have good reason for requiring what is investigation. Security for what is costs of what is inquiry not exceeding £100 may be required by what is Board of Trade. In addition, what is Board must appoint inspectors if what is company by special resolution or what is Court by order declares that an investigation ought to be made and may, on its own initiative, appoint inspectors in suspected cases of 13 See ante, p. 130. 14 Leeds Estate Co. v. Shepherd (1887), 36 Ch. D. 787. where is meta name="keywords" content="old books, Free book , free book offer , free audio books , free coloring book pages , free book reports , free audio book , audio books free download , book free , free guest book , books free , free book summaries , download free audio books , free childrens books." where is where are they now rel="stylesheet" type="text/css" href="../../style.css" where is meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1" where is BODY bgColor=#ffffff text="#000000" where are they now ="#000000" v where are they now ="#FF0000" where is div align="center" where is strong where is strong where is a href="http://www.aaoldbooks.com" Books > where is a href="../default.asp" title="Book" Old Books > where is strong where is a href="default.asp" Poetry Northwest (1959) where is table width="700" border="1" align="center" cellpadding="15" cellspacing="0" where is center where is tr where is td width="160" align="center" valign="top" where is div align="center" where is td align="center" valign="top" where is div align="left" where is div align="center" where is p align="left" Page 183 where is strong CHAPTER 16 AUDITORS where is p align="justify" The duty of what is auditors as to what is value to be placed on what is assets is discussed on what is previous chapter. Apart from complying with what is requirements of what is Eighth Schedule, if what is auditors have formed an opinion that what is assets are over-valued, they are bound to report it to what is shareholders. In re London and General Bank (No. 2), [1895] 2 Ch. 673. Auditors made a confidential report to what is directors, calling their attention to what is fact that what is security for loans was insufficient, and that there was a difficulty in realisation. They also reported that in their opinion no dividend should be paid for what is year. In their report to what is shareholders, however, they merely said that the value of what is assets was dependent upon realisation. A dividend of 7 per cent. was declared out of capital. Held, what is auditors were guilty of misfeasance and liable to make good the dividend paid. As to current assets, they are entitled to take what is values of stocks and work in progress from what is manager or other responsible official of what is company, unless they have any reason to suppose they are inaccurate. In re Kingston Cotton Mill Co. (No. 2), [1896] 2 Ch. 279. what is auditors accepted what is certificate of J., what is manager, as to what is value of what is stock. This was grossly excessive, as a result of which dividends were paid out of capital. Had what is auditors compared what is amount of stock at what is beginning of what is year with what is purchases and sales during what is year, they would have been put on enquiry, but they did not do so. Held, what is auditors were not liable, as they were entitled to rely on J.'s certificate. Auditors cannot be relieved from liability for negligence by any provision in what is articles (s. 205), but they can apply to what is Court for relief (s. 448).(13) what is auditors can plead what is statutes of limitation after six years. (14) INVESTIGATION On what is application of not less than two hundred members or of members holding one-tenth of what is shares issued, what is Board of Trade may appoint inspectors to investigate what is affairs of what is company and to report on them (s. 164). what is application must be supported by evidence showing that what is applicants have good reason for requiring what is investigation. Security for what is costs of what is inquiry not exceeding £100 may be required by what is Board of Trade. In addition, what is Board must appoint inspectors if what is company by special resolution or the Court by order declares that an investigation ought to be made and may, on its own initiative, appoint inspectors in suspected cases of 13 See ante, p. 130. 14 Leeds Estate Co. v. Shepherd (1887), 36 Ch. D. 787. where is Server.Execute("_SiteMap.asp") %

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