Audit and accounting insights - page 5

Another year is coming to an end, so for most companies and accounting departments the time of hard work and preparations to close the books has begun. On the basis of information received from our clients and inquiries addressed to us during the training courses conducted for financial and accounting departments, we have gathered a group of issues which, during the period of preparation of financial statements, are of constant interest and do not lose anything of their relevance. We have already discussed most of them for you on our blog; these are issues related to, among others: leasing, including IFRS 16 Leasing, investments in real estate IAS 40, the revaulation model according to IAS 16 or revenue recognition according to IFRS 15. In the following sequences we will present issues related to the creation and presentation of provisions (IAS 37) and the issue of residual value and depreciation according to IAS 16. Nevertheless, the greatest emphasis will be placed on the analysis of financial instruments.

Reaching out to you through different communication channels, we have recently extensively discussed the specific nature of the work of an auditor and the issues connected with their (proper) selection. We would also like to remind you how a company may benefit from being audited. We have already mentioned that it is a good thing if an auditor is your business partner for years, but now we want to show you what this is like in practice: what the benefits an auditor may provide to the audited company are and what the client is actually paying for.

What are the most common errors I come cross in financial statements? How do they distort the representation of economic events, thus producing unreliable data that is later presented to owners and certain institutions? Hence, what needs to be focused on in order to avoid these errors, close the financial year properly and save yourself the stress involved with an auditor’s visit? I encourage you to read my article as I go on to discuss selected aspects.

In this and in the next post, I am going to help you all realise and appreciate how immense the impact of managerial decisions is on the quality of company’s reporting. I would like to point out that if the company’s management board (and supervisory bodies) are not aware of the essence of accounting, do not understand the necessity of preparing financial statements and do not recognise the goal behind internal and external audit, any financial data processed by financial and accounting services are subject to material error, or at least fail to represent all economic events fairly and clearly.

We have already written a lot, both here and in national journals, about the importance of audit services, their meaning for businesses, the cooperation of management boards or supervisory bodies with auditors, and the qualities of a good auditor. Now it is time to say something about how this auditor (a statutory auditor or an audit firm) should be chosen.

As of July, enterprises with a headcount exceeding 250 were the first to have entered the Employee Capital Plans and they started enrolling their employees to the long-term saving scheme. Therefore, it is a good idea to answer the question what financial institutions will manage the PPK and what principles of withdrawing funds from employees’ accounts will be used? I encourage you to read my article.

The Cash flow statement is an element of financial statements. However, not all entities applying the provisions of the Accounting Act are obliged to prepare a cash flow statement.

On Monday, 1 July, the Employee Capital Plans were rolled out. Organisations employing more than 250 persons were the first to join the scheme, and they automatically enrolled their employees aged 18-55 in the PPK. What are PPKs and what should you know about them? I encourage you to read my article.

As the Council of Ministers recently adopted a draft amendment of the VAT Act, you need to take into account the fact that as of 1 January 2020 large companies, i.e. those with the average annual headcount of 250 persons or with an annual turnover exceeding EUR 50 million and with a balance sheet total of at least EUR 43 million, will have to submit the new SAF-T_VAT file. Other taxpayers, including local government units, will be obliged to submit the new file as of 1 July 2020.

As a result of a decision taken by the Ministry of Finance (MF) to reduce the gap in the value added tax (VAT) as fast as possible, a new type of report, JPK_VAT, was implemented as along with the latest technology for data verification and analysis.