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SIGNATURE KELLY DIGAN
TITLE CORP. COMPLIANCE ADM
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Ernst & Young LLP
Suite 1700
555 California Street
San Francisco, CA 94104
Report of Independent Auditors
Board of Directors
Matthews International Funds
In planning and performing our audit of the financial statements of
Matthews International Funds (comprising, respectively, of the Matthews
Pacific Tiger Fund, Matthews Asian Convertible Securities Fund and Matthews
Korea Fund) for the year ended August 31, 1997, we considered its internal
control structure, including control activities for safeguarding
securities, in order to determine our auditing procedures for the purpose
of expressing our opinion on the financial statements and to comply with
the requirements of Form N-SAR, not to provide assurance on the internal
control structure.
The management of Matthews International Funds is responsible for
establishing and maintaining an internal control structure. In fulfilling
this responsibility, estimates and judgements by management are required to
assess the expected benefits and related costs controls. Generally,
controls that are relevant to an audit pertain to the entity's objective of
preparing financial statements for external purposes that are fairly
presented in conformity with generally accepted accounting principles.
Those controls include the safeguarding of assets against unauthorized
acquisition, use or dispositions.
Because of inherent limitations in any internal control structure, errors
or irregularities may occur and not be detected. Also, projection of any
evaluation of internal control to future periods is subject to the risk
that it may become inadequate because of changes in conditions or that the
effectiveness of the design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be
material weaknesses under standards established by the American Institute
of Certified Public Accountants. A material weakness is a condition in
which the design or operation of the specific internal control structure
elements does not reduce to a relatively low level the risk that errors or
irregularities in amounts that would be material in relation to the
financial statements being audited may occur and not be detected within a
timely period by employees in the normal course of performing their
assigned functions. However, we noted no matters involving the internal
control structure, including procedures for safeguarding securities, that
we consider to be material weaknesses as defined above as of August 31,
1997.
This report is intended solely for the information and use of management
and the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
San Francisco, California
October 9, 1997
