Are the financial statements of savings banks prepared for the benefit of their depositors?;

              Are the Financial Statements of Savings Banks Prepared for the Benefit of Their Depositors?
BY EUGENE J. DONOHUE Principal, New York Office
Presented before The Savings Banks Auditors and Comptrollers Forum of the State of New York, New York — January 1959
IAM sure that you have all heard and probably engaged in discus­sions
concerning the presentation of financial statements by sav­ings
banks. I am also sure that most of you are quite satisfied with the statements presently being published by your individual banks and probably with those of other similar institutions. I should like to state, quite frankly, that I, as an accountant, feel there is substantial room for improvement in the statements which some savings banks are presenting to their depositors.
I have no criticism generally of statements prepared for manage­ment
use by the accounting departments of the various institutions with which I am familiar. Although these statements vary materially from bank to bank in both form and content, their design meets the specific requirements and desires of the management of each individual institution. However, this is an area in which it would be inappropri­ate
to generalize to a group whose members are so experienced in the management of savings institutions.
Rather I wish to direct discussion this evening to the financial statements, counter statements, or financial reports made available by the various mutual savings banks of New York to their depositors. These banks cite as their operating theme that they are operated solely for the benefit of their depositors. At those institutions with which I am personally familiar, I have seen numerous incidents which reflect this management approach. In your day-to-day operations, the mutual savings banks of New York are certainly operated for the benefit of the depositors. However, are their financial statements prepared for the benefit of these same depositors? I think our answer to this question is not so clear-cut, and may vary from one bank to another.
It is a frequent comment of accounting officers of savings banks that their depositors do not have the same interest in the operations of their savings bank as do the stockholders of commercial banks. If this is true, it is unfortunate. Obviously your depositors are the equitable owners of your savings banks. Why then are they disin-
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