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Corporate Transparency - Coggle Diagram

- - - - The company can choose to maintain its register
      - The company can choose to keep the relevant information on the register at CH, in which case it will not need to maintain the relevant register. It will need to inform CH of any changes in the information contained in the relevant register
- - - - To show and explain the company's transactions
      - To disclose with reasonable accuracy the financial position of the company at any time
      - To enable the directors to ensure that any prepared accounts comply with CA2006 and IAS
    - - Any individual accounts prepared by the company for that year
      - Any group accounts prepared by the company for that year
    - - The directors of a company are under a duty to prepare accounts for that company for each of its financial years
      - S.396 provides that the individual accounts must state
        
        The part of the UK in which the company is registered
        
        The company's registered number
        
        Whether the company is a public or a private company and whether it is limited by shares or guarantee
        
        The address of the company's registered office
        
        Where appropriate, the fact that the company is being wound up
        
        A balance sheet as of the day of the financial year, which give a true and fair view of the state of affairs of the company as at the end of the financial year
        
        A profit and loss account that provides a fair and true view of the profit or loss of the company for the financial year
    - - A parent company must also prepare group for each financial year
      - The information contained in the group accounts is largely the same as that found in the individual accounts except that the group accounts need to cover the accounts of the parent and all of its subsidiaries
      - Some subsidiaries can be excluded such as where the inclusion of a subsidiary is not material for giving a true and fair view
  - - - The strategic report
      - The directors report
      - The auditor's report
      - The directors remuneration report (quoted companies only)
    - - Any untrue or misleading statement
      - The omission from a report of anything required to be in it
    - - They knew the statement to be untrue or misleading or were reckless as to whether it was untrue or misleading
      - They knew the omission to be dishonest concealment of a material fact
  - - - A fair review of the company's business, which provides a balanced and comprehensive analysis of the development and performance of the company's buness during the financial year and the position of the company's business at the end of that year
      - A description of the principal risks and uncertainties facing the company
    - - Details of the main trends and factors likely to affect the future development, performance and position of the company's business
      - Information about the environmental matters the company's employees and social, community and human rights issues
      - A description of a company's strategy and business model
      - A breakdown showing at the end of each financial year he number of persons of each sex who were directors, senior managers and employees of the company
    - - Environmental matters
      - The company's employees
      - Social matters
      - Respect for human rights
      - Anti-corruption and anti-bribery matters
  - - - The names of the persons who were at any time during the financial year, directors of the company
      - The amount that the directors should be paid by way of dividend
      - A statement providing that
        
        So far as each director is aware, there is no relevant audit information of which the company's auditor is unaware
        
        Each director has taken all the steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company''s auditor is aware of that information
    - - Details of political donations exceeding £2,000 made by the company
      - Particulars of important events affecting the company and indication of likely future developments in the company's business
      - Details regarding the company's acquisition of its own shares
      - A description of the company's policy regarding the employment of disabled persons
      - Details of action taken by the company in relation to employee consultation and involvement
      - A statement summarising how the directors have had regard to the need to foster the business relationships with suppliers, customers and others
      - If the company is quoted it must also provide details concerning the company's greenhouse gas emissions, notable the quantity in tonnes of such emissions
    - - Which corporate governance code if any the company applied in that financial year
      - How the company applied the code
      - If the company did not apply a corporate governance code for the financial year, the reasons for that decision and an explanation of what corporate governance arrangements were applied for that year
      - If the company departed from the code, its reasons for doing so
    - - The corporate governance code to which the company is subject or which the company has voluntarily decided to apply
      - If the company has departed from the stated corporate governance code, it must explain which parts it has departed from and the reasons for doing so
      - A description of the main feature of the company's internal control and risk management systems
      - A description of the composition and operation of the company's administrative, management and supervisory bodies and their committees and a description of the diversity policy that applies to these bodies and how that policy is implemented
  - - - The name of the company whose accounts are being audited
      - A description of the annual accounts that are the subject of the audit and the period covered by those acocunts
      - A description of the financial reporting framework that was used to prepare the accounts
      - A clear statement as to whether, in the auditors opinion the annual accounts
        
        Give a fair and true view of the company's finances
        
        Have been prepared in accordance with the relevant financial reporting framework
        
        Have been prepared in accordance with the requirements of the CA2006
      - A statement on any material uncertainty relating to events or conditions that may cast significant doubt upon the company's ability to continue to adopt the going concern basis of accounting
      - A statement setting out whether, in the auditors opinion the information given in the strategic report and the directors report is consistent with the accounts and whether those reports are prepared in accordance with applicable legal requirements
      - A statement setting out whether the auditor has found any material misstatements in the strategic report and the directors report
      - If applicable, a statement setting out whether the directors remuneration report and corporate governance statement comply with the CA2006 and the DTRs respectively
      - If applicable, a statement whether the corporate governance statement complies with the relevant rules of the DTRs and whether a statement contains any material misstatements
      - A statement setting out whether adequate accounting records have been kept by the company and whether those records are in agreement with the individual accounts
  - - - A single total figure of remuneration for each director
      - Details of each directors pensions entitlements
      - Details of payments to past directors including loss of office payments
      - Details of directors shareholdings and share interests
      - A performance graph and table providing details of company performance over the last 5 years
      - The percentage change in remuneration of the CEO
      - A statement on how the company intends to implement the previous years remuneration policy
      - Details of how the directors remuneration policy of the company
- - - - The company is a small company
      - The company is a subsidiary
      - The company is dormant
      - It is a non-profit making company that is subject to a public sector audit
    - - The company must make sure they are eligible to act as auditor
      - A person who is not eligible cannot act as company's statutory auditor and will commit a criminal offence
      - S.1212 provides that a person is eligible to act as auditor if they satisfy the following 2 conditions
        
        The proposed auditor is a member of a recognised supervisory body such as ICAEW or ACCA
        
        The propose auditor is eligible for appointment under the rules of its supervisory body
      - S.1214 requires that a auditor can be independent. Certain persons are prohibited from acting as a company's auditor
        
        An officer or employee of the company or associated undertaking (parent or subsidiary or a subsidiary of the parent)
        
        A partner of employee of a person within (a) or a partnership to which a person within (a) is a partner
        
        if at any time during their term of office, an auditor becomes prohibited from acting as auditor due to lack of independence, then they must resign immediately and provide notice to the company that they have resigned due to lack of independence
    - - The directors can appoint the auditor in a private company first financial year providing that the appointment is made within the period for appointing auditors - this is 28 days after the end of time allowed for sending out copies of the annual accounts fort the previous financial year
      - In subsequent years, the auditor is appointed by passing an ordinary resolution before the end of the period for appointing auditors
      - If no appointment has been made by the end of the period, then s.487 provides that the auditor in office will be deemed to reappointed unless
        
        They were appointed by the directors
        
        The articles require reappointment by resolution
        
        The deemed reappointment is prevented because members representing at least 5% of the company's voting rights notify the company that they do not want the auditor to be reappointed
        
        The members have resolved that the auditor should not be reappointed
        
        The directors have resolved that no auditor should be appointed for the financial year in question
        
        The company is a public interest entity and the auditors appointment breaches the maximum engagement period
    - - In its first financial year, the directors appoint the auditor providing that the appointment is made before the first accounts meeting
      - In subsequent years the auditor is appointed by passing an ordinary resolution before the end of the accounts meeting at which the company's annual accounts and reports have been laid
      - There is no automatic reappointment process set out in CA2006
  - - - An auditors independence may be compromised where the auditor is overly reliant on the fee income that a particular audit generate
      - A companys auditor may also provide the company with other services, an auditor will likely be keen to conditue providing such non audit services and this desire may affect the auditors independenence
    - - Ensuring there is prior approval of non-audit services
      - Considering the impact this may have on independence
      - Reporting to the board on any improvement or action required
      - Taking into account the relevant regulations and ethical guidance
  - - - Whether adequate accounting records have been kept by the company and returns adequate for their audit have been received from branches not visited by the auditor
      - Whether the company's individual accounts are in agreement with the accounting records and returns
      - In the case of a quoted company, whether the auditable part of the company's directors remuneration report is in agreement with the accounting records and returns
    - - A right of access at all times to the company's books, accounts and vouchers
      - The right to require specified person to provide such informations and explanations as the auditor thinks necessary for the perofrmance of their duties
    - - Adequate accounting records have not been kept
      - The company's individual accounts are not in agreement with the accounting records and returns
      - The directors remuneration report is not in agreement with the accounting records or returns
  - - - Exempts an auditor from any liability that would attach to them in connection with any ngeligence, default, breach of duty or breach of trust occurring in the course of auditing a company's accounts
      - By which an indemnity for an auditor against any liability attaching to them in connection with any negligence, default, breach of duty or breach of trust occurring in the course of auditing a company's accounts
      - 2 exceptions
        
        A company can indemnify an auditor against any liability incurred by them in defending proceedings in which the auditor is acquitted or judgement given in its favour
        
        Auditors can limit their liability by entering into a liability limitation agreement with the company which is an agreement that purports to limit the amount of a liability owed to a company by its auditor in respect of nay negligence, default, breach of duty or breach of trust
    - - Where a contract exists between the company and the auditor, the the company may sue the auditor if they breach a term of that contract
      - If the auditor does not perform their duties with reasonable skill and share then the company can also sue for breach of the implied duty placed upon an auditor to act with reasonable skill and care
    - - A company can sue an auditor in tort if the auditor makes a statement they know to be false or the auditor provides a negligence audit
      - One issue that has generated a notable of case law is whether third parties who have suffered loss due to a negligent audit can sue the auditor
      - The courts have imposed strict limitations on a third par's ability to sue an auditor - the result is that an auditor will not usually owe a duty to the company's members or other third parties. Such persons will need to show the existence of a special relationship
    - - There are two principal offence that relate to an auditors conduct
      - S507 of CA2006 applies
        
        Where the auditor knowingly or recklessly causes an auditors report to include any matter that is misleading, false or deceptive in a material particular
        
        Where the auditor knowingly or recklessly causes an auditors report to omit certain specified statements
      - s.17 of the Theft Act applies where a person dishonestly with a view to gain for themselves or another or with intent to cause loss to another
        
        Destroys, defaces, conceals or falsifies any account or nay record or document made or required for any accounting purpose
        
        In furnishing information for any purpose, produces or make sure of any account, or any such recorder document which his knowledge is or may be misleading, false or deceptive
    - - Resignation
        
        An auditor of a company may resign by sending a notice to that effect o the company
        
        The auditors term of office will end on the date when the company receives the notice or on such later date as may be specified in the notice
        
        The notice will not be effective unless it is accompanies by a statement setting out the auditors reasons for resigning
        
        Such a statement will not be required if
        
        The auditor of a private company is ceasing to hold office at the end of the period for appointing auditors or the auditor of a public company is ceasing to hold office at the end of an accounts meeting
        
        The auditors reasons for ceasing to hold office are all exempt reasons or there are no matters connected with the auditor ceasing to hold office that they consider need to be brought to the attention of the embers or creditors of the company
      - Remval
        
        An auditor may be removed from office at any time by the members
        
        This power is exercisable by passing an ordinary resolution at a meeting - the WR cannot be used and special notice of the resolution must be provided
        
        The auditor must provide a s.519 statement
      - Replacement
        
        Where the term of office of the auditor of a private company expires and the company decides not to reappoint it, then a replacement auditor ca be appointed by the company passing a WR
        
        An auditor can be replaced by passing a resolution at a GM. Special notice is required
      - Rotation
        
        The rules as implemented under CA2006 are
        
        An auditor of a PE has a maximum engagement period of 10 years (this can be extended to 20 years after a public tender after at least 10)
        
        The FRC can extend the maximum engagement period by up to 2 years if it believes that exceptional circumstances exist
        
        If an auditor reaches the maximum engagement period and is replaced then the PIE cannot appoint that auditor for a period of 4 years beginning on the date after the maximum engagement period ended