Lindley L.J., Lopes L.J. and Kay L.J.

Name: re Kingston Cotton Mill Company (No.2)
Author: Lindley L.J., Lopes L.J. and Kay L.J.

Biographical details

Lindley L.J., Lopes L.J. and Kay L.J. published works such as re Kingston Cotton Mill Company (No.2). These writings evoke auditors, yarn and misfeasance.

Quotes by Lindley L.J., Lopes L.J. and Kay L.J.

Lindley L.J., Lopes L.J. and Kay L.J., re Kingston Cotton Mill Company… (1896)

“ An auditor is not bound to be a detective, or, as was said, to approach his work with suspicion or with a foregone conclusion that there is something wrong. He is a watch-dog, but not a bloodhound. He is justified in believing tried servants of the company in whom confidence is placed by the company. He is entitled to assume that they are honest, and to rely upon their representations, provided he takes reasonable care. If there is anything calculated to excite suspicion he should probe it to the bottom ”

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Source: Wikisource

Lindley L.J., Lopes L.J. and Kay L.J., re Kingston Cotton Mill Company… (1896)

“ It is no part of an auditor's duty to take stock. No one contends that it is. He must rely on other people for details of the stock-in-trade on hand. In the case of a cotton mill he must rely on some skilled person for the materials necessary to enable him to enter the stock-in-trade at its proper value in the balance-sheet. In this case the auditors relied on the manager. He was a man of high character and of unquestioned competence. He was trusted by every one who knew him. The learned judge has held that the directors are not to be blamed for trusting him. ”

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Source: Wikisource

Lindley L.J., Lopes L.J. and Kay L.J., re Kingston Cotton Mill Company… (1896)

“ It is of the highest importance that auditors, particularly, perhaps, in the case of joint stock companies, whose shareholders are dependent chiefly on their intelligence and vigilance, should perform their duty with scrupulous care. But if they have conducted their work with that amount of skill and care which can reasonably be expected from men of business in their position, is there any rule of law by which they can be made liable? ”

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Source: Wikisource

Lindley L.J., Lopes L.J. and Kay L.J., re Kingston Cotton Mill Company… (1896)

“ But, although it is no doubt true that such a process might have been gone through, and that, if gone through, the fraud would have been discovered, can it be truly said that the auditors were wanting in reasonable care in not thinking it necessary to test the managing director's return? I cannot bring myself to think they were, nor do I think that any jury of business men would take a different view. It is not sufficient to say that the frauds must have been detected if the entries in the books had been put together in a way which never occurred to any one before suspicion was aroused. ”

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Source: Wikisource

Lindley L.J., Lopes L.J. and Kay L.J., re Kingston Cotton Mill Company… (1896)

“ It is the duty of an auditor to bring to bear on the work he has to perform that skill, care, and caution which a reasonably competent, careful, and cautious auditor would use. What is reasonable skill, care, and caution must depend on the particular circumstances of each case. ”

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Source: Wikisource

Lindley L.J., Lopes L.J. and Kay L.J., re Kingston Cotton Mill Company… (1896)

“ Auditors must not be made liable for not tracking out ingenious and carefully laid schemes of fraud when there is nothing to arouse their suspicion, and when those frauds are perpetrated by tried servants of the company and are undetected for years by the directors. ”

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Source: Wikisource

Lindley L.J., Lopes L.J. and Kay L.J., re Kingston Cotton Mill Company… (1896)

“ It was further pointed out that what in any particular case is a reasonable amount of care and skill depends on the circumstances of that case; that if there is nothing which ought to excite suspicion, less care may properly be considered reasonable than could be so considered if suspicion was or ought to have been aroused. ”

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Source: Wikisource

Lindley L.J., Lopes L.J. and Kay L.J., re Kingston Cotton Mill Company… (1896)

“ LOPES L.J. This is an appeal by Messrs Pickering & Peasegood, auditors of the Kingston Cotton Mill Company, Limited, against an order of Vaughan Williams J. making them liable to make good to the assets of the company moneys of the company improperly applied in payment of dividends on the faith of certain balance-sheets certified by them.
A misfeasance summons was issued under s. 10 of the Companies (Winding-up) Act, 1890, against the directors and auditors. It was dismissed as to the directors, but the auditors were held liable. ”

Lindley L.J., Lopes L.J. and Kay L.J.

Biographical details

Quotes by Lindley L.J., Lopes L.J. and Kay L.J.

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Works by Lindley L.J., Lopes L.J. and Kay L.J.

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