RESPONSE TO THE “COMMUNITIES AND LOCAL GOVERNMENT” CONSULTATION DOCUMENT: REVISION AND CONSOLIDATION OF THE ACCOUNTS AND AUDIT REGULATIONS 2003 9SI 2003 No 533) AS AMENDED
1INTRODUCTION
1.1The AAT is pleased to comment on the issues raised in the Communities and Local Government consultation document on “Revision and consolidation of the Accounts and Audit Regulations 2003 (SI 2003 No 533) as amended”.
1.2We have over 49,000 full and fellow members and 68,000 student and affiliate members worldwide. Of the full and fellow members, there are over 3,300 Members in Practice who provide accountancy and taxation services to individuals, not-for-profit organisations and the full range of business types.
1.3We are a registered charity whose objects are to advance public education and promote the study of the practice, theory and techniques of accountancy and the prevention of crime and promotion of the sound administration of the law.
1.4In pursuance of those objects the AAT provides a membership body. We are participating in this consultation as part of our contribution towards the public benefit of achieving sound and effective administration of the law. We also feel that the issues raised in this consultation paper may, in the future, affect our members in practice and their clients.
2INTERESTS
2.1We are participating in this consultation as part of our contribution towards the public benefit of achieving sound administration of the law.
2.2We have no vested interests in the outcome of this consultation document.
3COMMENTS
3.1We believe that the issues raised in this consultation document have been well considered and the proposals address the issues raised. However, we do have the following comments.
3.2In paragraph 4.3 it states that the “small companies (statutory) definition depends on turnover, balance sheet total and number of employees”. We would like to clarify that this is the definition for accounting purposes. For audit purposes the definition depends on turnover and balance sheet total. Then there are the rules for group companies. Your proposal relating to gross income or expenditure being no more than £6.5million is much simpler, easier to apply and appears to be more appropriate to the public sector.
3.3In paragraph 5.2 it states that the RPO “…must re-certify the presentation of the annual accounts before member approval…”. Presumably, the RPO would only need to re-certify if the auditors have qualified the annual accounts.
3.4We support the proposal in paragraph 5.5 that the approval of the accounts for smaller relevant bodies should be by the body meeting as a whole rather than by a committee of the body, given that smaller relevant bodies have less onerous audit provisions.
3.5The Audit Commission report on “Auditing the accounts 2009/10 Parish Councils” dated February 2011 identified a number of persistently late audited accounts and qualified opinions. Therefore we would not support the removal of the criminal penalties in section 27(4) of the Audit Commission Act 1998 and suggest that these powers be transferred to the government department that will be taking over responsibility.