Watchdog gets tough on directors who file qualified accounts
FRRP is optimistic that new approach will encourage directors to comply with the law
Directors of more than 50 large private companies which filed qualified
accounts are to receive a warning from the
Financial Reporting
Review Panel to clean up their act.
They will be advised that if they continue to produce accounts below agreed
standards under the Companies Act again that the panel will review their
accounts.
‘We are giving directors of companies with qualified accounts an opportunity
to put matters right. We are writing to some of the companies concerned, but our
warning applies to all of them and, in future, we will not hesitate to take
appropriate action where such qualified accounts come to our attention, whether
or not we have previously written to the company concerned,’ said FRRP chairman,
Bill Knight.
The panel has employed a credit reference agency to alert them about
companies with qualified accounts lodged at Companies House after consulting
auditors who said they would be reluctant to voluntarily report businesses with
poor accounts. So far the panel has received notification of over 740 qualified
accounts.
The Panel has power to apply to the court for an order seeking the revision
of defective accounts but so far has managed to agree appropriate resolution
without legal action. However, it will be letting directors know that if the
matter goes to court they will be personally liable for court and account
revision costs.