accounts and auditors

From 6 April 2008 there will be a reduction of one month in the time for filing accounts.  This will apply to all accounting periods starting on or after that date. 

This means that the delivery time allowed drops from 10 months to 9 months for private companies and from 7 months to 6 months for public companies.  The filing date will generally be the same day of the month as the Accounting Reference Date but 9 (or 6) months later.  Where the accounting period ends at the end of a month, however, the filing period will run to the end of the relevant month, except for a company’s first accounting period.  For example, if a private company’s Accounting Reference Date were 30 June, its filing period would end on 31 March the following year, rather than 30 March.

There are penalties for late filing and, from 1 February 2009, the fine will double if a company files its accounts late in consecutive years.

A private company need not lay the accounts before a general meeting but must send them to members, debenture holders and those entitled to receive notice of general meetings by no later than nine months after the end of the accounting reference period or, if earlier, the date on which the company actually delivers its accounts and reports to Companies House.

A public company must lay its accounts before a general meeting within 6 months of the Accounting Reference Date  and must send the accounts to members, debenture holders and those entitled to receive notice of general meetings by no later than 21 days before the general meeting at which the accounts and reports are to be laid.  It must also publish its accounts on its website.

Both private and public companies can send out summary financial statements.  If the full financial statements have been audited, if shareholders have consented and if the summary financial statements have been compiled in accordance with section 427 (for private and unquoted public companies) or section 428 (for quoted companies) and the Companies (Summary Financial Statement) Regulations 2008.

Where an audit is required, auditors must now give an opinion on whether the accounts:

• are true and fair;
• have been properly prepared in accordance with the relevant financial reporting framework; and
• have been properly prepared in accordance with the requirements of the 2006 Act.

In the case of an individual, auditors’ reports will have to state the name of the auditor and be signed by him or her.  Where the auditor is a firm, the report must state the name of the senior statutory auditor, the name of the firm and be signed by the senior statutory auditor in his or her own name.  There is an exemption to stating the individual’s name if the company feels that there is a risk to the auditor or to any other person of serious violence or intimidation as a result of the auditor’s name being stated.  In such a case, a note of the company’s resolution must be given to the Secretary of State.  For obvious reasons, it should not be filed at Companies House!

It is now a specific offence under section 507 to knowingly or recklessly cause an auditor’s report to include information which is misleading, false or deceptive.  It is punishable by a fine of up to £5,000.

There are also revised duties on auditors and companies to notify the appropriate authorities, being the Secretary of State or the relevant supervisory body, when an auditor leaves office, setting out the circumstances or reasons, if any.