Preparation of Director’s Report
The Directors are responsible for preparing financial statements for each financial year in accordance with the Financial Reporting Standards (FRSs) and general accounting practice. The statements must give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. This requires the faithful representation of the effects of transactions, other events and conditions in accordance with reporting standards.
Preparing the Annual financial statement is a tedious task which needs meticulous processing of records of financial transactions. At InCorp, our experts can minimize the pressure on your in-house resources by helping you in:
- selecting and applying suitable accounting policies
- preparing financial statements in line with the international accounting standards
- presenting information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information
- providing additional disclosures to enable clear understanding of transactions, other events and conditions on the entities financial position and financial performance
Companies are legally obliged to include a Director’s Report in their annual financial statement. The report must give a fair review of the company’s financial and operational results and condition and also include additional information such as dividend recommendation, reserved earnings, details of directors and their interest, principal risks and uncertainties etc.
Director’s Report is an important communication medium for a company to interact with various interest groups such as investors, creditors, government bodies, business analysts etc. Therefore it is essential to ensure that the report includes all the relevant information succinctly yet without any ambiguity.
Preparation of Auditor’s Report
Companies are required to submit an Independent Auditor’s as well as Director’s Report as part of their annual filing requirements. Both reports are part of a system of checks and balances to ensure sound financial practices, and in turn, enhance investors’ confidence and uphold shareholders’ interest.
What companies must be audited?
All private limited companies are required to prepare audited financial reports except for those that fall within the definition of a “small company” during a financial year (FY) if it meets any 2 of the 3 criteria within the FY. Companies with corporate shareholders can also qualify for this exemption if the whole group collectively satisfies any 2 of the following 3 criteria within the FY.
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