Did the old firm sign off the Annual Report with an unqualified opinion? Or did they qualify their opinion e.g. "I don't believe that these accounts reflect a true and fair view because [of the calculation of deferred tax]."
the company auditors and the company could not agree on the tax treatment of a particular item in the accounts.
On the other hand, their treatment of this type of accounting item has to be the same for all clients in that sector: they can't allow one to adjust a charge to the previous year and advise others against doing so.
are there any other effects of this matter? Is the company in danger of becoming insolvent because of this?
Nail on head.Accounts are always open to differences of opinion on whether a charge should or should not be included. Companies manage their annual profits in all sorts of ways and the accounting rules and regulations try to standardise this but they are still open to different interpretations.
The companies act prevents them from doing that. Disagreement over accounting treatment is not a reason to dismiss auditors.2. Dump the old auditors summarily with their fees paid, hire new ones sharing the company view on tax treatment of this one item, pay them to re-audit everything and then present an agreed front in the final report.
The companies act prevents them from doing that. Disagreement over accounting treatment is not a reason to dismiss auditors.
Hi Red
With a September year end and one firm having a lot of business in this sector, the firm is most likely a Credit Union.
Does the Companies Act apply or are they subject to some other legislation?
Brendan
There is an extensive legal and regulatory framework in place for the Irish credit union sector. The following are the main items of legislation and regulations relevant to the regulation and supervision of credit unions:
- Central Bank Act, 1942;
- Credit Union Act, 1997;
- Central Bank Reform Act, 2010;
- Central Bank and Credit Institutions (Resolution) Act, 2011;
- Credit Union and Co-operation with Overseas Regulators Act, 2012;
- Central Bank (Supervision and Enforcement) Act, 2013; and
- Credit Union Act 1997 (Regulatory Requirements) Regulations 2016.
If it's a CU, there are additional rules.Hi Red
With a September year end and one firm having a lot of business in this sector, the firm is most likely a Credit Union.
Does the Companies Act apply or are they subject to some other legislation?
Brendan
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