Ltd Co profit and loss to be disclosed
Discussion
Berger 3rd said:
What are you saying isn’t accurate, the figures? In which case isn’t that HMRCs job, not CH? And how many companies use an accountant? Presumably more than 5-10%? So you’re essentially saying a huge percentage of accountants are bent?
I'm pretty sure HMRC don't have the resources or knowledge to audit accounts. Same for CH as it happens.The original idea was that accounts would be audited by a qualified auditor and then submitted. Since the audit requirement was dropped (1985 Companies Act?) along with the reduced reporting requirements in the mid 1990s it just opens it up to "creative" accounts being submitted.
Should, we go back to small companies audit, absolutely not as it is an onerous and expensive task for SMEs. Should we go back to full P&L disclosure yes as it gives the reader of the accounts some comfort.
There's a few exaggerations here. Putting micro accounts to one side, abridged accounts usually give a good amount of detail- revaluations, breakdown of debtors and creditors, number of employees etc. You can usually make an educated guess that's fairly accurate. Plus credit rating agencies are getting more sophisticated as each year goes by. You are missing an abbreviated P&L versus a mid-size plus company, but that's it for most established smaller trading businesses. We don't recommend micro accounts to our clients for a number of reasons, including credit.
MustangGT said:
Extremely likely? No, not necessarily so. Both sides of the balance sheet have to increase. In your example numbers, the company may have borrowed £1m to buy stock, both sides of the BS has increased, however, it doesn't give any indication of increased, or any, profitability. Given that loan would need servicing it may well indicate a decrease in profitability.
Your example doesn't match his example, as your balance sheet hasn't increased. Completely difference scenario. In his example, it'll be fairly easy in almost all situations to tell if the figures are massaged or not.uknick said:
I'm pretty sure HMRC don't have the resources or knowledge to audit accounts. Same for CH as it happens.
The original idea was that accounts would be audited by a qualified auditor and then submitted. Since the audit requirement was dropped (1985 Companies Act?) along with the reduced reporting requirements in the mid 1990s it just opens it up to "creative" accounts being submitted.
Should, we go back to small companies audit, absolutely not as it is an onerous and expensive task for SMEs. Should we go back to full P&L disclosure yes as it gives the reader of the accounts some comfort.
Audit exemption was 1994 with the other disclosure changes. Was originally <350k and <£1.4m balance sheet total for an accountant's report and <90k turnover for complete exemption. The original idea was that accounts would be audited by a qualified auditor and then submitted. Since the audit requirement was dropped (1985 Companies Act?) along with the reduced reporting requirements in the mid 1990s it just opens it up to "creative" accounts being submitted.
Should, we go back to small companies audit, absolutely not as it is an onerous and expensive task for SMEs. Should we go back to full P&L disclosure yes as it gives the reader of the accounts some comfort.
The big jump came when the 2013 EU Accounting Directive aligned small company thresholds for audit exemptions across the EU.
AndyC_123 said:
Disagree.
Whilst you might not be able to see any fine detail, if the balance sheet jumps from £1 million to £2 million, its extremely likely the company is generating plenty of profit.
How do you know they just haven't revalued something to increase their reserves?Whilst you might not be able to see any fine detail, if the balance sheet jumps from £1 million to £2 million, its extremely likely the company is generating plenty of profit.
Balance sheets can be made to look better (or worse) by applying certain accounting techniques.
Hill92 said:
Audit exemption was 1994 with the other disclosure changes. Was originally <350k and <£1.4m balance sheet total for an accountant's report and <90k turnover for complete exemption.
The big jump came when the 2013 EU Accounting Directive aligned small company thresholds for audit exemptions across the EU.
Thanks for this.The big jump came when the 2013 EU Accounting Directive aligned small company thresholds for audit exemptions across the EU.
Countdown said:
2 sMoKiN bArReLs said:
True.
I once reconstructed an externally audited set of accounts which showed a £50,000 profit. Based on the same data I came up with a £600,000 loss.
I once reconstructed an externally audited set of accounts which showed a £50,000 profit. Based on the same data I came up with a £600,000 loss.
How do you de-construct a set of Financial,Statements, re-construct them, and come up with a completely different Profi/Loss figure?
or did you have access to the TB, the various accruals and prepayments, and all the management estimates?
The point I'm getting at is that the underlying figures must have been wrong in order for the FS to be wrong.
Of course the numbers were wrong, just shocking the audit threw up nothing at all. (But, read the WorldCom wiki
)uknick said:
Hill92 said:
Audit exemption was 1994 with the other disclosure changes. Was originally <350k and <£1.4m balance sheet total for an accountant's report and <90k turnover for complete exemption.
The big jump came when the 2013 EU Accounting Directive aligned small company thresholds for audit exemptions across the EU.
Thanks for this.The big jump came when the 2013 EU Accounting Directive aligned small company thresholds for audit exemptions across the EU.
In the early 1990s, very small companies were exempted from the statutory audit. Medium sized companies needed to have a "Compliance Statement" signed by a qualified accountant. Larger companies still required an audit but now only qualified accountants who were also "Registered Auditors" were allowed to sign Audit Reports.
The "Compliance Statement" was eventually abolished and the thresholds for audit exemption were raised to the present levels.
In line with these changes, the statutory filing requirements for smaller companies were relaxed to the level they are at today.
All of these changes came about post 1990.
Puzzles said:
2 sMoKiN bArReLs said:
True.
I once reconstructed an externally audited set of accounts which showed a £50,000 profit. Based on the same data I came up with a £600,000 loss.
You may not have made the same judgements as management, the auditors etc I once reconstructed an externally audited set of accounts which showed a £50,000 profit. Based on the same data I came up with a £600,000 loss.
2 sMoKiN bArReLs said:
Puzzles said:
2 sMoKiN bArReLs said:
True.
I once reconstructed an externally audited set of accounts which showed a £50,000 profit. Based on the same data I came up with a £600,000 loss.
You may not have made the same judgements as management, the auditors etc I once reconstructed an externally audited set of accounts which showed a £50,000 profit. Based on the same data I came up with a £600,000 loss.
basherX said:
2 sMoKiN bArReLs said:
Puzzles said:
2 sMoKiN bArReLs said:
True.
I once reconstructed an externally audited set of accounts which showed a £50,000 profit. Based on the same data I came up with a £600,000 loss.
You may not have made the same judgements as management, the auditors etc I once reconstructed an externally audited set of accounts which showed a £50,000 profit. Based on the same data I came up with a £600,000 loss.
that in conjunction with under pricing in the first place. We dealt with them & they were tricky.Gassing Station | Business | Top of Page | What's New | My Stuff