Clearing up after others !
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Hi all - I find myself in a strange situation. I did the book keeping for a company for 2005 and an accountant did the financial statements. When asked to review the draft statments it quickly became apparent that it didn't have much bearing to my original TB - indeed VAT had found it's way into debtors and the creditors was wildly out. I did point these out in my review but it transpired that the accounts had already been filed.
I have been asked to do the statements for 2006 and I did write to the original accountant with the view to understanding where the errors occured but I have now given up as we veer from the sublime to the ridiculous.
I think that the best approach would be to work backwards which should lead me to the corrective adjustments.
I haven't been a MIP for long so would welcome any comments of how I should record the inevitble adjustments which will need to be made - especially as it would appear that the VAT liability was posted as a debtor - you can understand my concern in terms of future investigations !
Many thanks for your help.
ps I realise that my social life needs attention doing this on a bank holiday monday !
I have been asked to do the statements for 2006 and I did write to the original accountant with the view to understanding where the errors occured but I have now given up as we veer from the sublime to the ridiculous.
I think that the best approach would be to work backwards which should lead me to the corrective adjustments.
I haven't been a MIP for long so would welcome any comments of how I should record the inevitble adjustments which will need to be made - especially as it would appear that the VAT liability was posted as a debtor - you can understand my concern in terms of future investigations !
Many thanks for your help.
ps I realise that my social life needs attention doing this on a bank holiday monday !
0
Comments
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Re:Clearing up after others !
The previous accountant should have provided you with the necessary transfer information requested when you originally asked for professional clearance.
If the accounts prepared by the accountant were fundamentally incorrect (which appears to be the case) then you would need to re-state the prior year by virtue of a prior period adjustment which restates the comparative figures in the previous period and adjust the opening balance on the reserves for the cumulative effect. You would also need to disclose the effect of the previous periods errors and the effect it has had on the reserves in a note in the financial statements. Your comparative period will then need to have the words "as restated" underneath the financial year end to enable the user to understand that these have been restated from the original ones.
If you are reporting under FRSSE (effective January 2005) this deals with prior period adjustments which will help you understand how to deal with the errors. If you aren't reporting under FRSSE then refer to FRS 3 "Reporting Financial Performance" or IAS 8 "Accounting Policies, Changes in Accouting Estimates and Errors".
Kind regards
Steve0 -
Re:Clearing up after others !
Many thanks Steve - the accountant did a summary of the errors - however this hasn't been of much use as it still makes little sense.
Many thanks for your guidance.0 -
Re:Clearing up after others !
A summary of errors!!! :shock: :shock:
I have heard it all now.
Good luck (you'll need it by the sounds of it!)
Kind regards
Steve0