Big errors in last years accounts - advise please

paulstafford Registered Posts: 126 Dedicated contributor 🦉
I'm looking for a bit of advice:

New client - Ltd company. Last years accounts ( prepared by old accountant) contain some very large errors which have had a knock on effect on the results for this year.

I'm thinking of restating last years comparatives; processing a prior year adjustment; disclosing reason for restatment in this years accounts and submitting a revised CT comp for last year with the correct figures.

Submit revised set of accounts for last year to companies house - marked amended. Assuming client will pay for this!

Does this seem a reasonable course of action?


  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    At the end of the day it comes down to what the client will pay for.

    Bear in mind though that resubmitting the previous CT600 will mean the last year accounts possibly need re-doing to accompany it anyway, depending on whether HMRC will accept the amendments without.

    If they will, your suggestion sounds fine, I've done it like that before with a statement of recognised gains and losses.
  • Newbie
    Newbie Registered Posts: 229 Dedicated contributor 🦉
    If restating I would check to make sure the client is making a full disclosure to you, assuming the errors are totally the previous accountants fault you should be ok but always best to check.
  • Steve Collings
    Steve Collings Registered Posts: 997 Epic contributor 🐘
    In addition to the additional fees it might be worth reminding the client that if they don't agree to your proposed amendments then I doubt AAT will allow you to put your name to accounts that you know do not give a true and fair view. This is certainly the case with ICAEW and ACCA and am almost sure AAT will operate the same principles.

    Company directors have a legal responsibility under the Companies Act to ensure the accounts they approve give a true and fair view regardless of whether these errors are the directors' errors or the previous accountants.

    Kind regards
  • paulstafford
    paulstafford Registered Posts: 126 Dedicated contributor 🦉
    Thanks everyone.

    I'm going to see them this afternoon to recommend redoing last years accounts/ct return.
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