End of year accounts liability.
Discussion
Just a moan really.
So you pay an accountant a fortune to put your accounts together and submit them. You as the company director are expected to sign them on the basis that you fully agree with them.
Then if something goes pear shaped the director is fully liable and the accountant just washes their hands of all responsibility.
Surely if the person you pay to do a job has the correct skills they should be accountable also?
If you pay a bricky to do a job and the wall falls down its generally their fault!
Or am I missing something here?
So you pay an accountant a fortune to put your accounts together and submit them. You as the company director are expected to sign them on the basis that you fully agree with them.
Then if something goes pear shaped the director is fully liable and the accountant just washes their hands of all responsibility.
Surely if the person you pay to do a job has the correct skills they should be accountable also?
If you pay a bricky to do a job and the wall falls down its generally their fault!
Or am I missing something here?
BGARK said:
Just a moan really.
So you pay an accountant a fortune to put your accounts together and submit them. You as the company director are expected to sign them on the basis that you fully agree with them.
Then if something goes pear shaped the director is fully liable and the accountant just washes their hands of all responsibility.
Surely if the person you pay to do a job has the correct skills they should be accountable also?
If you pay a bricky to do a job and the wall falls down its generally their fault!
Or am I missing something here?
I think you're missing something. It's not just accountancy - the liabilities faced by an Employer/Director are pretty wide ranging.So you pay an accountant a fortune to put your accounts together and submit them. You as the company director are expected to sign them on the basis that you fully agree with them.
Then if something goes pear shaped the director is fully liable and the accountant just washes their hands of all responsibility.
Surely if the person you pay to do a job has the correct skills they should be accountable also?
If you pay a bricky to do a job and the wall falls down its generally their fault!
Or am I missing something here?
If the wall falls down and kills/injures somebody the aggrieved party won't be suing the bricky, they'll be suing YOU.
Most limited company accounts are no longer audited. AUDITORS do have a shared legal and statutory responsibility for limited company accounts (with the company directors) for which they sign off audit reports.
Going for the "non-audit" option effectively places the entirety of responsibility for the statutory accounts on the heads of the directors - even if a qualified accountant or a firm of registered auditors has been used to help prepare the statutory accounts.
IF there is a problem with the accounts, the directors carry the can - but they are perfectly entitled to sue the accountants if they feel that the problems were caused by the way the accountants prepared the accounts.
They can also lodge an official complaint with the professional body to which the accountant(s) belong.
Directors should be fully aware of their responsibilities for the statutory accounts BEFORE they sign them off.
Going for the "non-audit" option effectively places the entirety of responsibility for the statutory accounts on the heads of the directors - even if a qualified accountant or a firm of registered auditors has been used to help prepare the statutory accounts.
IF there is a problem with the accounts, the directors carry the can - but they are perfectly entitled to sue the accountants if they feel that the problems were caused by the way the accountants prepared the accounts.
They can also lodge an official complaint with the professional body to which the accountant(s) belong.
Directors should be fully aware of their responsibilities for the statutory accounts BEFORE they sign them off.
Eric Mc said:
Directors should be fully aware of their responsibilities for the statutory accounts BEFORE they sign them off.
The Director clearly will never be as competent as the Accountant, or if they are they would generally do the accounts themselves.I suppose its like being an "artist", you may sell music or paintings but not have a clue how to count to 10, thats why you employ help and skills in other areas.
Simpo Two said:
I suppose if you translate this into my business, mostly wedding photography, it means I can get the couple to sign a bit of paper and that will make any duff photos their own fault...
I wonder if I could get away with it?
that analogy doesn't workI wonder if I could get away with it?
this is more accurate if a couple brought you the memory card from their camera and asked you to print the photos and were then not happy with the prints, it would be their fault rather than yours wouldn't it?
BGARK said:
Eric Mc said:
Directors should be fully aware of their responsibilities for the statutory accounts BEFORE they sign them off.
The Director clearly will never be as competent as the Accountant, or if they are they would generally do the accounts themselves.I suppose its like being an "artist", you may sell music or paintings but not have a clue how to count to 10, thats why you employ help and skills in other areas.
Eric Mc said:
And, what's more, the accountant's signed report to the accounts states categorically where the responsibility for the accounts lies, so the directors can't say they weren't told.
OK, I'll adjust my analogy. I make the couple sign a form before they receive the photos which states the success of the photography is their responsibility. Bingo, home free 
The figures in the accounts are based on what the directors did during the year, their underlying record keeping and their general stewardship of the assets of the company. No director should EVER be unaware of these responsibilities.
If they aren't aware if this, they have no business being company directors.
If the directors chose NOT to have statutory audits carried out on the records of the company, they should be fully aware that they are taking on the entire responsibility for the figures in the accounts.
This is stated categorically in the "Accountant's Report" which will be attached to the full, statutory "non-audited" accounts.
If they aren't aware if this, they have no business being company directors.
If the directors chose NOT to have statutory audits carried out on the records of the company, they should be fully aware that they are taking on the entire responsibility for the figures in the accounts.
This is stated categorically in the "Accountant's Report" which will be attached to the full, statutory "non-audited" accounts.
Eric Mc said:
The figures in the accounts are based on what the directors did during the year, their underlying record keeping and their general stewardship of the assets of the company. No director should EVER be unaware of these responsibilities.
If they aren't aware if this, they have no business being company directors.
If the directors chose NOT to have statutory audits carried out on the records of the company, they should be fully aware that they are taking on the entire responsibility for the figures in the accounts.
This is stated categorically in the "Accountant's Report" which will be attached to the full, statutory "non-audited" accounts.
I agree with all of that, its just a bit frustrating to say the least that the professional that is being paid takes zero responsibility. A director might have a very good overview but again if they were as good as the accountant they wouldn't be required.If they aren't aware if this, they have no business being company directors.
If the directors chose NOT to have statutory audits carried out on the records of the company, they should be fully aware that they are taking on the entire responsibility for the figures in the accounts.
This is stated categorically in the "Accountant's Report" which will be attached to the full, statutory "non-audited" accounts.
By the way I have no issue or problem with my accountant or accounts but I did in the past, this experience made me much more vigilant than I used to be.
The obvious solution is to switch to having the accounts properly audited. If you go down that route, the accountant becomes liable for problems with the accounts as he has publicly stated that they are "true and fair".
And, if he/she is conducting the audit tests and checks - which are over and above what might be done in a simple "accounts preparation" scenario - there is a higher probability that problems with the underlying record keeping might be discovered.
Of course, to have the company accounts audited, the accountant has to be a "Registered Auditor" and will no doubt charge more for the additional audit work required.
And, if he/she is conducting the audit tests and checks - which are over and above what might be done in a simple "accounts preparation" scenario - there is a higher probability that problems with the underlying record keeping might be discovered.
Of course, to have the company accounts audited, the accountant has to be a "Registered Auditor" and will no doubt charge more for the additional audit work required.
Eric Mc said:
The obvious solution is to switch to having the accounts properly audited. If you go down that route, the accountant becomes liable for problems with the accounts as he has publicly stated that they are "true and fair".
And, if he/she is conducting the audit tests and checks - which are over and above what might be done in a simple "accounts preparation" scenario - there is a higher probability that problems with the underlying record keeping might be discovered.
Of course, to have the company accounts audited, the accountant has to be a "Registered Auditor" and will no doubt charge more for the additional audit work required.
The directors shouldn't be asking the accountant to audit his own work.And, if he/she is conducting the audit tests and checks - which are over and above what might be done in a simple "accounts preparation" scenario - there is a higher probability that problems with the underlying record keeping might be discovered.
Of course, to have the company accounts audited, the accountant has to be a "Registered Auditor" and will no doubt charge more for the additional audit work required.
That is what was "normal" until the rules were changed to allow small "owner managed companies" to be exempted from the statutory audit.
An auditor carries out the audit on behalf of the shareholders, not the directors. The auditors report is addressed to the shareholders for that reason.
Of course, in an owner managed company, the owners (shareholders) and the managers (directors) are one and the same.
An auditor carries out the audit on behalf of the shareholders, not the directors. The auditors report is addressed to the shareholders for that reason.
Of course, in an owner managed company, the owners (shareholders) and the managers (directors) are one and the same.
Eric Mc said:
The obvious solution is to switch to having the accounts properly audited. If you go down that route, the accountant becomes liable for problems with the accounts as he has publicly stated that they are "true and fair".
And, if he/she is conducting the audit tests and checks - which are over and above what might be done in a simple "accounts preparation" scenario - there is a higher probability that problems with the underlying record keeping might be discovered.
Of course, to have the company accounts audited, the accountant has to be a "Registered Auditor" and will no doubt charge more for the additional audit work required.
Out of curiosity Eric for say a £2m t/o business what would the difference in the two costs be, with or without a full audit?And, if he/she is conducting the audit tests and checks - which are over and above what might be done in a simple "accounts preparation" scenario - there is a higher probability that problems with the underlying record keeping might be discovered.
Of course, to have the company accounts audited, the accountant has to be a "Registered Auditor" and will no doubt charge more for the additional audit work required.
BGARK said:
Out of curiosity Eric for say a £2m t/o business what would the difference in the two costs be, with or without a full audit?
Hard to put a figure on that, as costs can vary greatly depending on how good, or otherwise the books are. An audit could easily double your accountancy costs though. If your accountant is competent, then you shouldn't really feel the need for an audit when one isn't required. Gassing Station | Business | Top of Page | What's New | My Stuff