SEARCH, INDEX, UPDATES, CONTENTS, UNDERSTANDING, SUMMARY OF REPORTS
When are reports by Accountants, Auditors, Chairmen, and Directors needed and what do they really mean ?
ACCOUNTANTS REPORT -
An Accountants Report may appear at the foot of the Balance Sheet or on a separate page adjacent to the Balance Sheet. The words explain on what the Accountant has prepared the Accounts. It is most important for what it says the Accountant has not done - it will usually include the phrase "without carrying out an audit". An Accountants Report is applicable to Sole Traders, Partnerships, and many small Limited Liability Partnerships and Limited Companies.
The Accountant issuing the report takes no responsibility for the underlying records, although a Chartered Accountant is under an ethical obligation not to issue Accounts knowing they are incorrect.
AUDITORS REPORT -
An Auditors Report may appear at the foot of the Balance Sheet or on a separate page adjacent to the Balance Sheet. It is only applicable to those, normally larger, Limited Liability Partnerships and Limited Companies Accounts which have been subject to an Audit.
The Accountant issuing the report will have carried out a limited examination of the underlying records. From that limited examination he will have formed an opinion which is given in the report.
An examination of every transaction and every document possessed by the company would not guarantee that the Accounts are correct, and an audit does not attempt to provide that level of assurance..
CHAIRMANS REPORT -
A Chairmans Report is only seen on (normally published) Limited Company Accounts. It is not required by law, but it is an opportunity for the Chairman to put his view of the company's progress on record. The Auditors Report does not cover the details in the Chairmans Report, although the Auditors will discuss any inconsistency with the Chairman.
DIRECTORS REPORT -
A Directors Report is only seen on Limited Company Accounts. It is required by law.
One of the many disclosures required by the Companies Act is a review of the business. This may be a short statement such as "The result for the year is considered satisfactory" or it may be several paragraphs written by the directors to put their view of the company's progress on record (in place of a Chairmans Report)..
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