Annual Reports and External Audit Flashcards
What are the differences between listed and quoted companies?
A listed company is one listed in the Official List maintained by the UKLA. A quoted company is a company whose equity share capital has been listed in the UK, officially listed in the EEA state or admitted to dealing on the NYSE or Nasdaq
A listed company has additional disclosure requirements, where can these be found?
Listing Rules and Disclosure and Transparency Rules
Do micro and small companies need to file their profit and loss accounts with the Registrar?
No
What is the strategic report?
This is used by the directors to inform the members how they have fulfilled their s.172 duty
What is the director’s report?
Overview of the company’s financial position at the end of the financial period
What is the directors’ remuneration report?
Made up of an annual statement by the chair of the remuneration committee, annual report on remuneration and a remuneration policy.
This is usually only disclosed for quoted companies
Name some factors which can be included within a strategic report
- Risks and uncertainties
- Trends and factors
- Business model
- KPIs
- Environmental Factors
- Employees
- Employee diversity
- Social, community and human rights issues
What is the purpose of an auditor’s report?
Provide an independent opinion to the members on the truth and fairness of the financial accounts and some sections of the narrative reports
Which companies are exempt from an audit?
- Small companies
- Dormant companies
- Subsidiaries
According to the Companies Act, members can request an audit to be carried out. How much percentage must the members have to request an audit?
10%
What documents can an auditor access?
- company books, accounts and records;
- minutes
- all notices and other communications relating to any general meeting
- generally anything the auditor thinks necessary
Name some example services which a Public Interest Entity (PIE) is prohibited from providing to their audit clients
- tax services
- payroll services
- valuation services
- legal services
- human resources services
If an auditor provides non-audit services that are not prohibited, they must assess whether the provision of those services will have any effect on their audit independence
What percentage must a non-audit service not exceed for a PIE?
70% of the audit fees
How many consecutive years can an auditor be appointed to a PIE?
10 years + an additional 10 years if a tender has been carried out
How frequent must an audit partner rotate for an individual PIE?
7 years
