Company accounts errors – whose fault is it – software or user?

In a recent blog post, reference was made to errors in accounts filed at Companies House. The errors referred to in that blog were down to the use of a spreadsheet template that had not been updated for years! https://ion.icaew.com/itcounts/b/weblog/posts/a-spreadsheet-the-solution-to-all-your-needs-not

Just what does get checked by Companies House when they are filed? Is there any quality control at their end? A google search indicated that the rejection process is largely manual. Reasons for rejection include:-

Already filed up to a date; accounting reference date missing; balance sheet signature missing; invalid company name; company name and number mismatch; company name mismatch. Technical disclosure rejection was not mentioned in the results I found.

I have seen some accounts rejected (and I filed them!) because one sentence had been inadvertently ticked in the software to be included at the foot of the balance sheet; this had to be removed and filed again.

So many issues have been noted in recent weeks with accounts we examined that are filed on the public record.

Some accounts and a company confirmation statement were downloaded recently in preparation for a meeting with a prospective new client. It is often easy to tell if accounts have been prepared on spreadsheets or accounting software has been used. In this case, it was clearly software – but no indication as to which one.….some accounts are instantly recognisable as having been generated in a particular product.

“Filleted Accounts” had been filed. The balance sheet showed a provision for liabilities £5, and the Capital and Reserves shows only the Profit and Loss Account balance. The £5 is share capital-incorrectly coded.

The corporation tax provision was shown separately in the notes although it could have been included in Other Creditors – so as it stands it is quite easy to work out the approximate profitability of the company. This is not good given some of their customer base!

The Intangible assets described as Goodwill were written off over 5 years according to the policy – however a £2,700 charge this year and last on a cost of £27,000 is a 10 year write off according to my calculator!

Still – it does provide me with lots of things to highlight at my meeting!

On enquiry, it transpired the Goodwill was not in fact Goodwill. I asked what the Motor Vehicles were on the fixed assets notes – it turned out this should have been Fixtures and Fittings.

In another set of small company accounts we looked at, a full detailed profit and loss account and the corporation tax return had been filed at Companies House!

How can just a trial balance from accounting software be accepted? How can you have a balance sheet one year with assets of several hundred thousand pounds shown and the following year file dormant company accounts with £1 share capital in both the current year and in the comparatives?

It is accepted that hundreds of thousands of accounts are filed at Companies House with more and more filed electronically rather than on paper, and it is accepted that it is possible to file more information than the statutory minimum, but there are some filings that really do beggar belief.

What is the worst example that you have come across on the public record?

Anonymous