The heads of the top UK and Irish accounting institutes have warned directors to face up to how they present their 2008 financial statements as soon as possible, in light of a potential glut of going concern warnings from their auditors.

With restricted access to borrowing facilities and the likelihood of recession, business must now consider how to be as open and transparent as possible about the risks they face going forwards, the heads wrote in a letter to the FT.

'Even in those cases where directors conclude there are material uncertainties that need to be disclosed, it does not mean the company concerned will cease to be a going concern,' the letter stated.

'What is critical is that all those involved in the financial reporting chain take the time to understand the nature of the uncertainties as well as the proposed management response.

'They should consult with their auditors as well as wider stakeholders early in the process to ensure that everyone has time to deal with matters in a considered fashion.'

The letter was signed by ICAEW chief executive Michael Izza, ACCA chief executive Helen Brand, ICAS chief executive Anton Colella, Pat Costello of the ICAI and CIMA chief executive Charles Tilley.

Further reading:

Read the letter here

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