Statutory Auditors - Real or Imagined!

Posted by Kathryn Maybury on Monday, 15 June 2015

A post by Kathryn Maybury | Managing Director | KOMSEC Limited | Company Secretarial Services | Corporate Governance | Compliance |

Tel: +353 (0) 1 2107595 Email: kmaybury@komsec.ie

 

It seems obvious but, in reality how many companies actually check their Statutory Auditor is entitled to act as an Auditor?

Although not prolific in number, there are some hard core individuals that persist in holding themselves out as Statutory Auditors even though they are not entitled to act in such a capacity.  The difficulties for companies who, albeit unwittingly, retain such individuals can cause various problems, and serious financial loss.

For example, a company files its Annual Return(s) with what it believes to be properly Audited Financial Statemens attached.  It is subsequently found out the individual who prepared the Financial Statements had criminally held himself out as a Statutory Auditor when not entitled to do so.

Result - the company paid an individual to carry out an Audit which is found to be invalid, and the company must now retain an authorised Statutory Auditor to re-do the job incurring an additional set of fees.  A double whammy you may think but, no - it is a triple whammy and why?

Audited Financial Statements are filed in the Companies Registration Office with a Company's Annual Return.  Where those Financial Statements have been prepared by an unauthorised Statutory Auditor the Company must re-file and the Annual Return is deemed to have not been filed at all thus exposing the Company to probable payment of penalty late filing fees.  Talk about rubbing salt into the wound.

The Director of Corporate Enforcement successfully took a case in April 2015 against one of those hard core offenders resulting int he individual being found guilty of having acted as an Auditor when already disqualified from doing so, and producing false audit reports.

To ensure your Company does not get caught out unwittingly take five minutes to check the Companies Registration Office.  Go to the Audit Search Facility on their website (www.cro.ie) where you will find detials on firms, indivduals names, Auditor Registration Number, and recognised Accountancy Bodies.  Still in doubt?  Then contact the Accountancy Body and look for another Auditor!

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