# Audit Exemption for Ltd company - date on balance sheet



## sean7 (2 Feb 2011)

Hi guys,

Not sure whether it is important or maybe I'm too paranoid but is there any importance in the date on the balance sheet when submitting yearly accounts & claiming audit exemption?

Eg. annual return for 06/2009-07/2010 & AR date 28/01/2011

There is a statement claiming audit exemption just below balance sheet numbers, date underneath it and a space for director's signatures.

My question is: Can I put any date there, or does it have to be the date just before AR date eg 27/01/2011 or does it have to be date in the accounting year in question eg any date between 06/2009 & 07/2010 to avail of audit exemption?

The reason I'm asking is that I want to make sure that audit exemption has been claimed properly and there were several changes in director's of the company so have to make sure that the director who's signing under that date was the director of the company at that time.

Hope it makes sense to you 

Thanks!


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## eamo_keating (3 Feb 2011)

First things first. The signatory date on the balance sheet does not have to be the year end, it simply has to be the date upon which the accounts were signed. So, if it is the 27/1/2001, then that is fine. Always try and file your B1 annual return as soon after the AR date to avoid any problems. 

If you file your B1 annual return online, you are granted 28 additional days from the AR date to file it (by 24th February 2011). You are then granted an additional 28 days in which to file the signed abridged financial statements along with the signed B1 (24th March 2011). Note that the signature date can be any date up to the 56th day after the AR date but its not wise to leave the filing that close to the AR date + 56 days as anything can happened to cause a delay in the filing (postal delay, absent director etc) and thus a loss of audit exemption so it is prudent to get it filed as close as possible to the actual AR date. 

Finally, if there were several changes in directors during the year, you need to ensure that a B10 form has been filed with CRO for each of the changes made. These forms are theoretically meant to be filed within 14 days of the appointment but the CRO are not too strict in this, you can simply backdate them. Note however, that they need to be filed in advance of the B1 annual return. Otherwise, the B1 will be rejected as it does not recognise the directors names.


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## Paddy199 (3 Feb 2011)

The date on the accounts is the date the accounts were approved at the AGM. The directors sign the accounts on behalf of the board, and the board approved the accounts at the AGM.

There are criteria regarding when an AGM can take place and the required notice of such a meeting. Thats a company secretarial matter and you can google it.

If your year end is 31 Dec 2010, and you sign the accounts on 31 March 2011, you have certain responsibilities for any events that occur between the balance sheet date and sign off of the accounts (i.e. post balance sheet events or PBSE). They can be adjusting or non adjusting PBSE, depending on effect on accounts. This is more important for audits.
An example would be flooding which could have being an issue for some companies like BT this year, although I think their y/e is April.


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## Guitarist (3 Feb 2011)

Sean7 - I think you should consult an accountant and perhaps that what you'd expect from me as an accountant! However, the company will lose iits audit exemption (and for two years) should you for whatever reason be deemed to have filed late with CRO.
CRO are now screening accounts and they do return them if they don't tick the particular boxes that CRO deem worthy (they also let some dreadful examples onto the register but that's another days arguement). Be careful.


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## Paddy199 (3 Feb 2011)

Sean7,

You can only claim audit exemption in your first annual return (not the 6 month one). 
If you have being auditing in the past, you have to get your auditor to resign and notify the CRO of this. Various paperwork has to be presented for this. You then tick the audit exemption box on your B1. 

The subsequent years you don't need to tick this box.

As you need signed accounts for submission with your B1 return, you will have to hold an AGM sometime prior to submission and sign off your accounts on that date. Use the same date on all pages of the accounts.


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## sean7 (3 Feb 2011)

Thank you all, I really appreciate your help. It's going to be my third AR including the 6 month one. I just want to make sure I claim audit exemption correctly. I did claim it in my previous AR (my accounting year runs from 01/07 - 30/06) and I signed off my previous balance sheet on the 22nd July (22 days after financial year end).

I was reading the following on the CRO website and it did confuse my a little:

_The year in question must be the current year - section 32 provides that  the directors must be of the opinion that the company "will satisfy"  the conditions - use of the future tense precludes the decision being  taken in respect of a year that has already ended._

Can anyone explain the above?

Paddy199  > I'm correctly understanding that I do NOT need to tick audit exemption box in my current return although I'm claiming the exemption?

PS- can't afford an accountant as the company is barely trading and the reason I have it open is because I took legal action against other company overseas and need to have my company open in case of winning the lawsuit, but these things are taking ages!


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## RonanC (3 Feb 2011)

sean7 said:


> I was reading the following on the CRO website and it did confuse my a little:
> 
> _The year in question must be the current year - section 32 provides that  the directors must be of the opinion that the company "will satisfy"  the conditions - use of the future tense precludes the decision being  taken in respect of a year that has already ended._
> 
> Can anyone explain the above?



from CPA 





> *Deciding to avail of the audit exemption*
> Once the directors are satisfied that the company meets all criteria then they may move ahead to avail of the exemption. The decision to avail of the exemption must be recorded in the minutes of the directors.
> The directors should ensure that the company is not required by its Memorandum and Articles of Association to have an annual audit. The directors should also consider whether any third party reporting requirements exist which require them to have an audit



The directors must decide during a financial year if they wish to avail of audit exemption for that financial year, they cannot decide after it has happened.. but stranger things happen 

If an auditor is in place already and the company wishes to go for audit exemption, the directors must serve notice on the auditor that their appoinment is being terminated. 




sean7 said:


> Paddy199  > I'm correctly understanding that I do NOT need to tick audit exemption box in my current return although I'm claiming the exemption?



If you are claiming audit exemption on a set of financial statements (accounts), then you must reflect this on the B1 as well by ticking the claiming audit exepmtion box.


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## sean7 (3 Feb 2011)

Thanks Ronan

_The directors must decide during a financial year if they wish to avail  of audit exemption for that financial year, they cannot decide after it  has happened.. but stranger things happen_

Is the above recorded in minutes only? 
Am I correct that the date on the accounts (balance sheet) has nothing to do with audit exemption?
And finally, can the date on the accounts be later than AR date (eg AR 28 Jan & balance sheet signed off on 05 Feb)?


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## RonanC (3 Feb 2011)

sean7 said:


> Thanks Ronan
> 
> _The directors must decide during a financial year if they wish to avail  of audit exemption for that financial year, they cannot decide after it  has happened.. but stranger things happen_
> 
> Is the above recorded in minutes only?



Yes only in the minutes, but it is then confirmed in the audit exemption statement on the balance sheet, and a directors report if you file one, and  signed by two directors. 



sean7 said:


> Am I correct that the date on the accounts (balance sheet) has nothing to do with audit exemption?
> And finally, can the date on the accounts be later than AR date (eg AR 28 Jan & balance sheet signed off on 05 Feb)?



What date are you talking about here? The accounts should be signed off and presented to an agm, this is the date that goes on the balance sheet. This date could be after the ARD (made up to date) of the B1, ie; 

Accounts year end = 31/12/2010, 
ARD = 30/03/2011
Accounts signed off on 01/04/2011
B1 & accounts then lodged with CRO on 28/04/2011

I'm not an accountant but I cannot see anything wrong with this example


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## sean7 (4 Feb 2011)

Below is the statement and the date (highlighted in red) I'm refering to:


_The company is availing itself of the exemption provided for by Part III of the Companies (amendment no 2) Act 1999._
_The company satisfies the conditions specified in section 32 of the 1999 Act (as amended by section 53 Companies (auditing and accounting) Act 2003 and by section 9 Investment funds, Companies and Miscellaneous provisions Act 2006)._
_No notice under section 33(1) of the 1999 Act has in accordance with section 33(2) of the 1999 Act been served on the company. _
_We acknowledge the company’s obligations under the Companies Acts, 1963 to 2009, to keep proper books of accounts and prepare accounts which give a true and fair view of the state of affairs of the company at the end of its financial year and of its profit and loss for such year and to otherwise comply with the provisions of those acts relating to accounts so far as they are applicable to the company._
_We hereby certify that we have relied on the specific exemptions contained in Sections 10 and 12 of the Companies (amendment) Act 1986 on the grounds that the company is entitled to the benefit of those exemptions as a small company._

_Approved by board DD MM YYYY
_
_On behalf of the Directors_
_Signatures 1 & 2_


Does it have to be the same date as per company minutes or can it be any date after the financial year and before the submission of AR submission to the CRO?


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## RonanC (4 Feb 2011)

sean7 said:


> Below is the statement and the date (highlighted in red) I'm refering to:
> 
> Does it have to be the same date as per company minutes or can it be any date after the financial year and before the submission of AR submission to the CRO?



It is dated (of signature) when signed for presentation to the agm, thats all.


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## BarMcc (4 Feb 2011)

The minutes recording the decision to avail of incorporation should be signed and dated during the financial year.

The accounts should be signed and dated after the year end but before being submitted to CRO.


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## sean7 (4 Feb 2011)

Is there a maximum 15 month gap between the AGM dates? If my 08/09 accounts were signed and dated 22/07/2009 so my 09/10 accounts can only be signed and dated between the end of that accounting period & 22/10/2010?

Is it ok that the accounts are signed by the directors which are no longer directors of the company thus the AR will be signed by different directors?


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## Paddy199 (4 Feb 2011)

Yes there is a max 15 month gap. And correct. So use 22 Oct 2010. 

No sign it with current directors. If resigned directors sign accounts, they need their heads examined. Remember the directors signing the accounts are doing so on behalf of the board of which they are a member. How can a resigned director do this? They probably weren't even at the AGM to approve the accounts.


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## sean7 (4 Feb 2011)

How can current directors sign the accounts under the date which they weren't directors at that time? eg. accounts are signed by Directors on 22/10/2010 and the Directors later resigned (eg 12/2010) so the AR (B1) will be signed by the new Directors who were appointed December 2010 but the accounts submitted together with B1 are signed by the old DIrector's?


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## T McGibney (4 Feb 2011)

Backdating signatures, in any situation, is a recipe for confusion and problems. It is best avoided altogether.


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## sean7 (4 Feb 2011)

Can the new Directors (appointed 12/2010) sign the accounts which will be submitted to the CRO and are dated (approved by board) 22/10/2010?

The thing is that the accounts are not signed and since there is a max 15 month gap between the previous years accounts they need to be dated latest 22/10/2010 but the current directors have been appointed only in 12/2010


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## T McGibney (4 Feb 2011)

Sorry this doesn't make sense. If they weren't directors on 22/10/10, how can they pretend otherwise?


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## sean7 (4 Feb 2011)

Thanks, really appreciate all the help.

Lastly, what are the implications if accounts were approved after 15 months from previous approval?


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## sean7 (4 Feb 2011)

Thanks Rob1, are you saying that I could get the current directors to sign the B1 and sign the approval of 09/10 accounts even today (04/02/2011) when AR date is 28/01/11 and submit it to CRO and there shouldn't be any issues with the CRO that the accounts were approved 19 months after the previous approval?


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