Argh not sure if this beyond my capabilities

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Sarah-Lou
Sarah-Lou Registered Posts: 141 Dedicated contributor 🦉
in General accounting discussion
I've been contacted by a lady who wants her accounts prepared for a potential purchaser of her business.

her husband normally does all her bookwork, self assessment, tax etc.

I'm not sure what would be required as never come across this before. Is it beyond what we can do as MIP?

Thank you!

Sarah-Lou

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  • slackda
    slackda Registered Posts: 460 Dedicated contributor 🦉
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    surely you should just be preparing a SOFP and SOCI as of todays date?

    -don't panic :D
  • Sarah-Lou
    Sarah-Lou Registered Posts: 141 Dedicated contributor 🦉
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    I figured they would be preparing the annual accounts themselves as usual and wanted something fantastic for their buyers and wasn't sure what it would be!

    It's a small retail outlet.

    Surely a buyer is just going to want to see the last few years accounts which they have prepared themselves or do they need them signed as such to say they are right whereas not being chartered i'm not sure if I can do that anyway?
  • slackda
    slackda Registered Posts: 460 Dedicated contributor 🦉
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    I guess they might want audited acconts which have been approved by a Chartered Accountant , something that you can't do.

    I would ask the question about the prepareation of the annual accounts?
    I beileive that that is all you could offer in this situation, may be provide so management style information such as performance ratio's to add some extra meaning to the numbers?
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    I don't think it's a problem per se. It's not beyond what we can do - essentially it's accounts prep and a bit of management accounts.

    My concern would be that they have done their own accounts. In order to put weight behind it, they want an accountant to have done it.

    Purchasers usually want to see 3 years of accounts.

    Realistically, this means that you need to prepare 3 years of accounts. You can't sign off accounts you haven't done - especially ones that have been DIYed. Are they prepared to pay for that?

    If they have an agent who is selling the business, I would be inclined to ask them what they require. Auditing is probably not necessary, but it depends on the type/ size of business.
  • rehana
    rehana Registered Posts: 61 Regular contributor ⭐
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    I work in commercial property and we see both audited and unaudited accounts from potential buyers or lessee's.
    We normally request the last three years accounts along with bank and credit references.
  • Sarah-Lou
    Sarah-Lou Registered Posts: 141 Dedicated contributor 🦉
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    Thank you. I've emailed them back and asked exactly what they require but I have a feeling they possibly don't know but just feel they want 'something' from an accountant! Will see what they ask for before decided if it is for me or not!

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