Iam well thanks, just busy with IAB exams at the moment, I trust you are keeping well?
Whilst this can be done, you would need to be covered by your supervisory body for limited assurance engagements, and be covered by your PII. I dont know many bookkeepers who have this in place. Although you can do it through the AAT, the risk is higher than a regular engagement, where you have done the work nearer the time.
Like you say there will be a lot of work involved, and I would want to make sure the fee is suitable, but above all i would want to be sure that i was covered.
I am sure it is probablya client with the best intensions but i would be carefull.
edited due to stupidity
-- Edited by NickCraggs on Thursday 2nd of August 2012 02:11:22 PM
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Nick
Nick Craggs FMAAT ACA AAT Distance Learning Manager
would you sign a cheque if you could see neither the amount or the payee?
You are committing your professional integrity to work that you had no part in in order to give credibility to accounts that currently have non.
Personally I would only do this for a client if I were to reproduce the accounts from original records which would cost the client the full cost of doing their accounts for a given year (you don't necessarily reproduce the accounts but you need to be in a position that you could so that you can confirm everything in the accounts).
So yes, I would sign them off (or not if I disagreed with them) for a fee provided that I was given access to all original documents from the period in question so that I could properly assess the truth and legitimacy of the accounts.
My name doesn't go on anything that I am not completely happy is correct and to ensure that the accounts are correct will cost a fee not dissimilar to if they had employed my services during the period in question.
Note that the above is the equivalent of saying I don't want to do this and I'm willing to risk not having you as a client to make my point.
And of course the other question to ask yourself here is what do you do if your calculations come up with figures that are materially different to theirs? (been there with a client that had no idea about accruals, prepayments or depreciation.... Yes, of course it's cheaper to do it yourself than involve professionals! Not).
Sure that others will have a different take on this but that would be my adopted stance,
I'll sign them but it's a lot of confirmation work and it will cost a lot.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I've seen this sort of thing before where clients do their own accounts and then hit a brick wall when trying to take out a loan so need an accountant to legitimise their work... Which often makes for interesting and on occassion side splitting reading!
I think case law particularly apt for this would be RBS vs Bannerman, Johnstone , Maclay and others (2002) where the bank depended upon the work of the auditors in order to justify the loan.
Because the audited accounts did not show the true state of affairs the accountants were taken to the cleaners by RBS.
However, that raises a point in relation to the engagement letter in that is BJM&O had included an exclusion clausse their laiibility would have been limited (if anything at all).
Lor, ensure that you have a water tight exclusion clause in your engagement letter (you should have one available from the AAT).
Here's a handy document the covers the legality of such clauses.
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
thanks for your replies, more has came to light, the lady has spreadsheets for the last 3 years. she would like me to produce accounts from this and sign them off.
Now I'm thinking should I accept the figures in the spread sheets to be correct or should i ask to do these from scratch?.
Slightly different scenario but similar requirement.
Figures in spreadsheets are only as good as the underlying evidence.
As mentioned in the above posts you need to have access to all original information and then recreate the accounts. The spreadsheets will give clues as to how she got to her final figure but in themselves are not your number one priority.
General rule is that we should always seek complimentary evidence of every representation from a client.
HTH,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
thank you all for your input sorry my answers are short an sweet, lack of time!. But I have decided to check the spreadsheets and have evidence of entries, there fore increasing my charge to the client.
I read this thread with interest and, at the risk of hijacking it (which isn't my intention) I wondered who can sign off what. Sure, anyone can sign a certificate saying, I'm a Bookkeeper, and I did this, and to the best of my knowledge and belief, it's correct, but if you rely on it, you do so at your own risk. But who would rely on that (apart from RBS, perhaps)? Certainly not a chartered accountant auditor brought in to produce the Fiancial Statements.
So far as I am aware, it takes a registered auditor to sign off Company Accounts ... or rather to provide a report to members ... what, exactly does "sign-off mean? Sole traders don't have to have audited accounts - but must show everything to the taxman if asked ... and so on ...
So, please, someone, explain where lines are drawn, and who carries the can when they are crossed (sorry about the mixed metaphor!).
1. Sole trader report by accountant preparing the accounts. Generally it will be along the lines of they have prepared the accounts based on the information provided. Usually they dont accept any responsibility so if anything is wrong that the taxman finds the sole trader usually ends up carrying the can.
2. Ltd company non-audit report by accountant preparing the accounts. Along similar lines to 1 above. Prepared based on the information provided. Generally the accountant wont take any responsibility if anything is wrong unless reasonable for them to know about in the information provided. Anyone can sign a non-audit report for a ltd company. Dont need to be chartered accountants. That is why some companies just prepare the accounts themselves as they dont need to be signed off by a 3rd practice. In practice abbreviated accounts are filed at Companies House (abridge version of the full stat accounts) and generally the accountant wont attach their report as there is no legal obligation for them too.
3. Ltd company audit report by accountant preparing the accounts. Audit reports can only be signed by registered auditors who are usually chartered accountants (though think ACCA members can also get audit certificates). Accountant will be liable if there is anything materially wrong if they dont pick up on it. Though if they dont find say a fraud that is going on then they wont be liable if their audit work didnt happen to pick up evidence of the fraud.
I think that there is some confussion in your reply between the accounts that most SME accountants deal with and those that are audited in which case the auditor passes opinion upon the accounts which they do not prepare.
Not all accountants are auditors and it seems as though fewer and fewer are choosing to go down that litigous path.
Taking ACCA as an exemple body to become an auditor one must pass the UK variants of P2 (advanced Corporate Reporting) and P7 (Advanced Audit ) (as well as passing all of the other papers of course).
You must then work in a properly supervised audit environment for three years post qualification before you are able to apply for an audit practice certificate making it even more difficult that a standard practicing certificate to acquire.
By sign off accounts as shown in this thread the posters are actually talking about accounts work which almost all accountants are able to do espechially as it is the owners of the entity who are signing to say that they agree with the prepared accounts whereas with audited accounts the external auditor is expressing an opinion on the truth and fairness of the accounts.
Other accountants do not express an opinion but the fact that the accounts were prepared by accountants lends them credibility without any opinion being expressed by anyone but the owners of the business that the accounts represent the state of affairs of the business for the period in question.
Hope that clarifies matters,
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
