What Are Accounting Records?

Accounting records are all documents and books used in the preparation of financial statements or reports relating to financial audits and examinations. Accounting records include assets and liabilities, financial transactions, books, journals and all supporting documents such as receipts and invoices.

An independent examination of accounting records includes examining the company's accounting records and preparing an independent report based on those records. The examiner's role is to provide what is called a "negative assurance”. This includes examining the information provided by the company and determining whether the examiner has noticed any problems (e.g., lack of financial statements).

In addition to examinating accounts, the independent examiner can also help prepare accounts in the format required by the company for consideration at the annual general meeting or another meeting.

An examination of accounting statements is different from an audit of financial statements. If your company's constitution asks for an audit, an independent examination of the financial statements may not be sufficient.

What does an examiner do?

An independent examiner should check all your records for the period under review. His or her task is to give an informed opinion on the basis of the accounts whether he or she has found evidence that the accounts are not being maintained properly or that the figures presented do not correspond to the accounts.

The examiner should:

  • Check the opening and closing balance. The company may have more than one bank account and one or more cash and petty cash floats.
  • Check the documents confirming income (e.g. company accounts, copies of receipts).
  • Check documentation supporting expenses (e.g. company invoices, cash receipts, and bus/train tickets). Approvals to withdraw cash at an ATM and permission for larger cash withdrawals.
  • Make sure that certain individual items are suitable and reasonable.

 

Why is an independent examination of accounts useful for your company?

It's good for the company if the accounting records are seen by someone outside the company. It gives the whole group and external organizations the confidence that the group's money is well managed.

Contact us by phone or email for professional advice and assistance in the examination of the accounting records to avoid mistakes. If you have any questions regarding your specific needs, we are at your full disposal.

 

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