Published Accounts Mr. BarryA-level Accounting Year 13

Published Accounts The student is introduced to: Basic knowledge of the rights and duties of directors Directors’ report Basic knowledge of the functions of the auditor Auditors’ report A basic knowledge of the impact of the relevant statutory requirements on published financial statements An analysis of published company reports Mr. BarryA-level Accounting Year 13

Published Accounts Mr. BarryA-level Accounting Year 13 On completion the student should: Be aware of the legal requirements to produce company accounts Have an appreciation of the functions and duties of the directors and auditors of a company Understand the difference between accounts prepared for internal use and for publication Be able to understand published company reports and accounts Have an ability to discuss and comment on the published annual reports of a limited company

IAS 1: Presentation of financial statements IAS 1 Covers the form and content of financial statements: – Balance Sheet – Income Statement – Statement of Changes in Equity – Cash flow statement – Notes to the financial Statements including Non-current Asset Note (Schedule) Standard gives substantial guidance on the form and content of published financial statements. (IAS 7 Cash flows) Mr. BarryA-level Accounting Year 13

Limitations of published accounts 1Based on historical information and take a long time to produce. Past performance is no guarantee of future performance 2Summarised figures hide the detail of specific costs 3Window dressing occurs e.g. Revaluations 4Human aspect is not seen which can tell possible investors about culture or work ethic etc. 5Not accessible/ too complex for non-specialist users Mr. BarryA-level Accounting Year 13

Notes to the Financial Statements Contents: amplify information given in the accounts, determined by the level of detail given on the face of the statements. Gives: – More detailed analysis or breakdown of figures in the statements – Narrative information, explaining figures – Additional information, contingent liabilities or commitments Order of notes: – Statement of compliance with IFRS – Statement of measurement basis and accounting policies – Supporting information – Other disclosures Mr. BarryA-level Accounting Year 13

NOTES TO THE FINANCIAL STATEMENTS- STRUCTURE Provide information about Basis of preparation (specific accounting policies) Disclose information as per IFRSs Show any other / additional information required for a “fair presentation” that is not on IS or BS Present notes in a systematic manner and cross referenced to IS, BS or Cashflow. – Statement of compliance with IFRS – Statement re accounting policies – Supporting information to IS, BS etc in sequence – Other disclosures as per IFRS Mr. BarryA-level Accounting Year 13

NON-CURRENT ASSET NOTE: Example NON-CURRENT ASSET NOTEE'000 wLANDBUILDINGSPLANT & MACHVEHICLESTOTAL Op bal Q € 960 € 240 € 2,000 € 900 € 4,100 ADDITIONS3 € 900 DISPOSALS4 € (10) REVALS € - IMPAIRMENT2 € (460) CL BAL € 500 € 1,140 € 2,000 € 890 € 4,530

NON-CURRENT ASSET NOTE: Example continued ACC DEP Op bal Q € - € 200 € 400 € 300 € 900 CHARGE FOR YR5 & 6 € 10 € 320 € 100 € 430 DISPOSALS4 € (55) REVALS € - IMPAIRMENT € - CL BAL € - € 210 € 720 € 345 € 1,275 NBV € 960 € 40 € 1,600 € 600 € 3,200 NBV € 500 € 930 € 1,280 € 545 € 3,255

What is a director Stewards Officer of the company Responsible for running the company Every company must have a minimum of 2 directors One of these can act as company secretary as well Power and responsibility Must act in accordance with company law Mr. BarryA-level Accounting Year 13

Directors report Part of the financial statements Business review Mr. BarryA-level Accounting Year 13

Responsible Business Behaviour Six factors the board cannot ignore 1.The likely long term consequences of any decision 2.The interest of employees 3.The need to foster business relationship with customers, suppliers etc 4.The impact of their decisions on the community 5.The desirability of maintaining high business standards 6.The need to act fairly between members Mr. BarryA-level Accounting Year 13

Duties of Directors 1.Approve and sign the financial statements, ensuring they are filled with the registrar of companies under the Companies Act 2.The financial statements must be comparable, understandable, relevant and reliable 3.Ensure they are produced in accordance with relevant IAS’s and IFRS’s 4.Oversee an official audit of the financial statements Mr. BarryA-level Accounting Year 13

An audit is an independent external review of a company's financial statements Verify that the accounts have been prepared in accordance with company law and generally accepted accounting standards The product of the audit is an audit report The audit report expresses an opinion What is an audit Mr. BarryA-level Accounting Year 13

Auditing Duties laid out in Audit Engagement Letter (ISA 210: Terms of Audit Engagement) -CRISIS Carry Out an Audit; Report an opinion to members (True and Fair View, SAS 600, ISA 700)); be Independent of company; Irregularities (Fraud, errors); exercise Skill & care Mr. BarryA-level Accounting Year 13

Based on case law rather than a specific definition Not saying that something is 100 % correct Example – €10 error on a balance of €1million is not significant – €10 error on a balance of €50 is significant True and Fair View Mr. BarryA-level Accounting Year 13

A material error will change somebody's decision Example – A bank might give you a loan if you have no other debt – A bank might not give you a loan of they know you owe €1m to another institution Material Mr. BarryA-level Accounting Year 13

Summary Income Statement Statement of Financial Position Statement of Cash Flow (IAS 7) Notes to the accounts Non current Asset Note Other notes Statement of changes in Equity EPS (NP attributable to ordinary shareholders / no. of ordinary shares in issue) Mr. BarryA-level Accounting Year 13