# sample audit exempt accounts



## iamthemoney (10 Jan 2012)

hi , i am wondering where i can get a copy of accounts for a small audit exempt company, I have the CRO information leaflet 10, which has a sort of sample at the back, but I was trying to find something along the lines that was already accepted by cro already, that could just be modified to include relevant details...


i know that you can download copies of submitted accounts from the cro, 
but how does one find audit exempt ones?

thanks


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## mandelbrot (10 Jan 2012)

You'd need to know the name / CRO number of an audit exempt company.

And actually, if you knew what you were looking at and saw the state of some of the accounts that get accepted by the CRO your mind would boggle... at the ineptitude of both the accountants sending in the stuff (and it is often accountants in practice) and the CRO in accepting it (considering how anal they can be about certain things)...

So, what I'm saying is, just by looking at something someone else has submitted and had accepted, don't assume it actually complies with the legislation...


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## Bill Struth (11 Jan 2012)

A small company claiming audit exemption need only submit a balance sheet, with the 5 audit exemption clauses signed off by two directors.


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## 44brendan (11 Jan 2012)

Yes, to a large extent the information submitted to the CRO is worthless for establishing the financial condition of a company.


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## smeharg (11 Jan 2012)

Don't get confused with the financial statements a small company is legally obliged to prepare (directors report, statement of directors responsibilities, profit & loss, balance sheet and related notes) with the abridged financial statements submitted to the CRO.

The accounts must be prepared in accordance with the companies acts and accounting standards. When submitting the abridged financial statements to the CRO you are stating that the balance sheet is a copy of the balance sheet in the full accounts.

Revenue will also look for the full financial statements in the event of a tax audit.

Chartered Accountants Ireland have sample financial statements for sale on CD. You'll find it on their website.


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## mandelbrot (11 Jan 2012)

Bill Struth said:


> A small company claiming audit exemption need only submit a balance sheet, with the 5 audit exemption clauses signed off by two directors.



...and you've just proven my point for me! 

What about the statutory notes to the accounts, such as director's remuneration, share capital etc...

Also, the statement of director's responsibilities...


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## Bill Struth (11 Jan 2012)

mandelbrot said:


> ...and you've just proven my point for me!
> 
> What about the statutory notes to the accounts, such as director's remuneration, share capital etc...
> 
> Also, the statement of director's responsibilities...



Notes and directors responsibilities are not required by cro if a small company and claiming audit exemption. As i said, a balance sheet and 5 audit exemption clauses suffice.


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## mandelbrot (11 Jan 2012)

Bill Struth said:


> Notes and directors responsibilities are not required by cro if a small company and claiming audit exemption. As i said, a balance sheet and 5 audit exemption clauses suffice.



 Really? Don't I feel silly!

I see the statement of director's responsibilities isn't required but it is considered best accounting practice to include it.

But I can't see anything to suggest that notes aren't required. I was given to understand that a note is required _"if explanation of any figure is necessary to understand that figure or to give a “true and fair view” of the state of affairs of the company."_

My reading of Appendix 2(e) in Info Leaflet 10 from the CRO would suggest that certain notes will be required... [broken link removed]

Am I missing something here? Have you a link?


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## T McGibney (12 Jan 2012)

Bill Struth said:


> Notes and directors responsibilities are not required by cro if a small company and claiming audit exemption. As i said, a balance sheet and 5 audit exemption clauses suffice.



Sorry, the Companies Acts set down minimum accounts disclosure requirements for both abridged accounts and full accounts. These include various items that must be disclosed in the notes to the full accounts and abridged accounts. These are mandatory and failure to do so is generally understood to be a breach of the statutory obligation to keep 'proper books of account', which is an indictable criminal offence.   Any attempt to produce abridged accounts without having first prepared full accounts is also likely to be a similar breach, albeit more serious in that properly completed abridged accounts will contain a declaration that full accounts have been prepared, and any false declarations could land the company and its directors in serious difficulty.

Fwiw, there is no explicit requirement that abridged accounts must "give a “true and fair view” of the state of affairs of the company (which may arise due to the exclusion of various items not subject to mandatory disclosure under the Companies Acts), but the full accounts must do so.


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## DB74 (12 Jan 2012)

Bill Struth said:


> Notes and directors responsibilities are not required by cro if a small company and claiming audit exemption. As i said, a balance sheet and 5 audit exemption clauses suffice.



A company is statutorily obliged to file Notes with their abridged financial statements,whether they are a small company or not.

The Companies (Amendment) Act 1986 contains the information as to which ones they are obliged to include (there are 6) and which ones they are entitled to omit.


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## Paddy199 (12 Jan 2012)

Totally agree with the last few posts. Certain notes are required for abridged accounts in accordance with Companies Acts. 

I do hope someday, the CRO will crack down on this.


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## mandelbrot (12 Jan 2012)

PHEW... Bill had me feeling embarrassed there for a while..! So my original point stands then, the standard of accounts that a lot of people are getting away with filing to the CRO, is atrocious...


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## Importer (12 Jan 2012)

This whole subject of statutory accounts for small companies amazes me.

Most companies in Ireland are small companies, family held,  single member companies with "husband and wife" directors

Now "The accountants" on here are not satisfied that these small companies would just complete abridged accounts, they also want them to complete "full accounts" including Directors reports, Statements of directors responsibilities,funds flow statements  and detailed notes.

Just remember that a set of accounts is nothing more than an "Information pack" and in the format prescribed by the companies acts for both full and abridged accounts, it is very very poor information. The information is usually very untimely (often nine months after the balance sheet date), usually not complete, not completely relevant, presented in a template type format and if we are to be realistic,not widely used by anybody. Most companies fulfill the requirements at great expense and merely file the end result. A complete and utter waste of time.

As we all know, The only worthwhile information eminating from most companies are its management accounts. This is the information that forms the basis of all management decisions and action.


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## DB74 (12 Jan 2012)

Importer said:


> Now "The accountants" on here are not satisfied that these small companies would just complete abridged accounts, they also want them to complete "full accounts" including Directors reports, Statements of directors responsibilities,funds flow statements  and detailed notes.




Couple of points here


1. It is THE LAW that the company prepares a full set of accounts, compliant with all aspects of the Companies Acts 1963-2009. Just because the only accounts that the public ever see are the abridged accounts doesn't mean that the company doesn't HAVE TO prepare a full set of accounts. Neither I, nor any of the other "accountants" or "solicitors" or "tinkers, tailors, soldiers, or sailors" can change that.


2. As per FRS1 Cash Flow Statements, a company which is classified as a small company under the Companies (Amendment) Act 1986 is exempt from preparing a funds-flow or cash-flow statement.


3. How can any company file a Corporation tax return without first preparing a P&L a/c


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## Importer (12 Jan 2012)

If I can just summarise my point

The cost and burden on small companies of preparing statutory accounts, in their present format, is completely disproportionate to the benefit derived from the said accounts by the users (if any) of the information contained within them.

Statutory accounts,  of SME companies in their present format are not sufficient information for :

a) Investors
b) bankers
c) Managers / Directors
d) Shareholders
e) Suppliers

These accounts are only relevant for ensuring compliance with company law. As it stands today, preparation of such accounts is an utter waste of resources.


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## T McGibney (12 Jan 2012)

Importer said:


> If I can just summarise my point
> 
> The cost and burden on small companies of preparing statutory accounts, in their present format, is completely disproportionate to the benefit derived from the said accounts by the users (if any) of the information contained within them.
> 
> ...



In that vein, feel free to blame the lawmakers for this perceived state of affairs. Please don't blame the accountants who try to ensure as best they can that their clients don't break the law.


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## mandelbrot (12 Jan 2012)

Importer said:


> As we all know, The only worthwhile information eminating from most companies are its management accounts. This is the information that forms the basis of all management decisions and action.


 
There's more than just management decisions to be considered though. 

What about the balance sheet - do you see no use / importance _*to anyone*_ in a standardised balance sheet, with standardised notes to break down these figures?

It may not be timely, but it can be better than nothing, or (in the absence of standardisation) misleading information.


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## mandelbrot (12 Jan 2012)

Importer said:


> If I can just summarise my point
> 
> The cost and burden on small companies of preparing statutory accounts, in their present format, is completely disproportionate to the benefit derived from the said accounts by the users (if any) of the information contained within them.
> 
> ...


 
Based on what you're saying then, even further statutory obligation would be needed, in order to require companies to produce statutory accounts that *DO* provide sufficient information for the parties described above...


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## Importer (12 Jan 2012)

Yes indeed, More regulation OR less regulation would be better than what we have today...

If I were "active" in the accounting profession, I think i would be very disheartened, dotting i's and crossing t's and being careful to comply with every sub regulation of the company laws just to have my work filed away with very little "worth". I cant see any job satisfaction in that. A Directors report is a case in point. I have never seen a directors report say anything of substance in a set of statutory accounts. I mean, whats the point.

My response was prompted after earlier contributors in the thread were
bemoaning the quality of accounts being filed. Within reason, I dont think it matters too much what is being filed. Most of these reports are never being read and if they are it is usually in conjunction with more detailed information supplied in parallel.

I'm not having a go at the accountants but I think there is a responsibility on the accounting profession acting together to reform this area to make the statutory accounts process more valuable.


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## DB74 (12 Jan 2012)

Importer said:


> I think there is a responsibility on the accounting profession acting together to reform this area to make the statutory accounts process more valuable.



Valuable to who though?

Some of the directors reports for PLC's are very detailed


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## Importer (12 Jan 2012)

Mandlebrot

You ask if a balance sheet has any value. Yes of course it has but not if its completely out of date which they invariably are.

If you decide to download the balance sheet of a new trading partner from the CRO, you might be very lucky with your timing to get a balance sheet just 10 months old but on average the "latest" balance sheet available will be  18 - 20 months. It helps but working with such old information is of limited value. In the current climate anything could have happened to that company in the intervening period.


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## mandelbrot (12 Jan 2012)

Importer said:


> Mandlebrot
> 
> You ask if a balance sheet has any value. Yes of course it has but not if its completely out of date which they invariably are.
> 
> If you decide to download the balance sheet of a new trading partner from the CRO, you might be very lucky with your timing to get a balance sheet just 10 months old but on average the "latest" balance sheet available will be 18 - 20 months. It helps but working with such old information is of limited value. In the current climate anything could have happened to that company in the intervening period.


 
OK, but I'm struggling to see what you think should be the situation, as an alternative to what presently exists?

You're looking at things purely from the commercial perspective, that if something is of no real commercial benefit then it shouldn't happen, but as we all know that's not the real world. Companies have to be regulated in some way, and being required to publicly file a certain amount of financial information annually is a means of doing that (in other jurisdictions as well as this one). The information has to be statutorily required, otherwise there can be no standardisation, no comparability etc...

In my job, I regularly look at the balance sheets (and notes) of companies, as filed to the CRO, and the fact that the information is historical is of no consequence to me (in fact for the job I do, it has to be historical!) - my concern is that the information is accurate, and agrees with (or reconciles to) other information. If it's a free for all where everyone is just filing what they feel like, without notes or explanation of anything, the information is useless.

So, I'm not saying what exists is perfect, but what's your alternative?


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## Gervan (6 Feb 2012)

I have read somewhere, but now can't find it, that a note is required on the balance sheet of a company in negative equity. (small company)
Is it actually to be included on the balance sheet, or with the notes to accounts? Can anyone point me to an example, or the statute section?
Thanks


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## iamthemoney (14 Feb 2012)

it would be useful for others, for a sample of  an actual audit exempt return could be added to this post, to take the mystery out of it!


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## mandelbrot (15 Feb 2012)

iamthemoney said:


> it would be useful for others, for a sample of an actual audit exempt return could be added to this post, to take the mystery out of it!


 
They can be seen on the CRO site in leaflet:
[broken link removed]


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