I was talking to senior executives at the ACCA yesterday, and hearing of complaints about the credit industry from accountancy firms on behalf of their disgruntled clients. it appears that the increasing number of going concern statements in audited accounts containing references to “material uncertainties” about future trading aren’t going down too well with credit grantors. The argument goes that many credit managers are reading these going concern statements, often talking about the difficult economic backdrop, impact on cash flow etc as and treating them as seriously as Auditors qualifications.
As these going concern statements are becoming commonplace in statutory accounts being filed at companies house as the recession continues, the attitude of credit grantors towards these statements will become even more important: the more negative the approach, the more difficult it will be for companies to claw their way out of recession.
No one , including directors of businesses or accountants, want to attach their names and reputations to incorrect or false statements in audited accounts, but if they tell the straightforward truth i.e. it’s bloody tough out there and yes, there are uncertainties about the future which we acknowledge, will the credit industry take the dimmest view of this honesty and penalise companies too harshly?
I’d be interested to hear some accountants’ views on this.
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