Does your accountant ask you to sign a waiver?

[VEIGHT]

Does your accountant make you sign a waiver when doing accounts for liability etc?

Would be interested to know if this is common practice.

[Eric Mc]

Are you talking about accounts for a limited company?

Are the accounts subject to a statutory audit?

[MitchT]

Do you mean a "limitation of liability" clause?

[VEIGHT]

Eric Mc said:

Are you talking about accounts for a limited company?

Are the accounts subject to a statutory audit?

Yes for limited company and no to the second question.

[VEIGHT]

MitchT said:

Do you mean a "limitation of liability" clause?

I forget the wording I'll have to check but yes that sounds about right.

[Eric Mc]

The legal responsibility for non-audited limited accounts rests entirely on the shoulders of the directors of the company. That is how it is set out in the Companies Act.

I am pretty sure that all limited company accounts that are unaudited will contain a fairly standard declaration in the accounts which sets out the respective legal responsibilities of the accountant and the directors. This is so the directors are perfectly clear in their understanding of the legal position and there is no confusion.

Here is a fairly standard "Accountant's Report" to a set of non-audited limited company accounts -

"As described on the balance sheet you are responsible for the preparation of the financial statements for the period ended DD/MM/YY set out on pages three to six and you consider that the company is exempt from an audit.
In accordance with your instructions, I have compiled these unaudited financial statements in order to assist you to fulfill your statutory responsibilities, from the accounting records and information and explanations supplied to me".



There is also a declaration on the balance sheet setting out the directors' responsibilities -

"The company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the period ended DD/MM/YY.
The members have not required the company to obtain an audit of its financial statements for the period ended DD/MM/YY in accordance with Section 476 of the Companies Act 2006.

The director acknowledges her responsibilities for:
(a) ensuring that the company keeps accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and
(b) preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of each financial year and of its profit or loss for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company.
The financial statements have been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies and with the Financial Reporting Standard for Smaller Entities (effective April 2008).

The financial statements were approved by the director on DD/MM/YY and were signed by:



Mr J Bloggs - Director

[V8OW]

VEIGHT said:

Does your accountant make you sign a waiver when doing accounts for liability etc?

Would be interested to know if this is common practice.

It's fairly common I think, and ensures that directors have made the required representations/confirmations, and presumably covers the accountant if it turns out that something hasn't been disclosed, or if certain items have been omitted from the accounts.

I think it's a more formal way of ensuring directors acknowledge their responsibilities, and confirm that they have provided all relevant information that formed the basis of preparing their accounts. I'm not sure whether it would stand up in court however.

[Eric Mc]

The court's first port of call when it comes to company statutory accounts will always be the directors - as it is set out in statute law (the Companies Act) that the accounts are the responsibility of the directors.

Accountants will only have a direct legal responsibility for the accounts if they have been formally audited.

[Monkeylegend]

As a sole trader I signed a "waiver" accepting responsibility for the accuracy of the information I provided to my accountant, and confirming he had produced my accounts and tax return based on my information.

I was always happy to sign this every year.