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Companies (Reports And Accounts)

Volume 978: debated on Thursday 14 February 1980

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asked the Secretary of State for Trade what proportion of the accounts of quoted companies is qualified by their auditors; and if he is satisfied that the interests of company members are safeguarded when accounts are so qualified in consecutive years.

I understand from the Stock Exchange, which under its listing agreement requires any significant departure in accounts from the standards approved by the principal accountancy bodies to be disclosed and explained, that of 2,961 company accounts received by the Exchange in the year ending 31 December 1979, 176 contained auditors' qualifications, of which 137 were in respect of departures from Statements of Standard Accounting Practices. The comparative figures for the year ended 31 December 1978 were 3075, 146 and 106 respectively. I am satisfied that the provisions of the Companies Acts whereby the auditors of a company must report to the members on the company's accounts is a valuable safeguard of the interests of the members as well as of other interested parties. The extent to which a qualification is a cause for concern will of course depend on whether the qualification is technical or material.

asked the Secretary of State for Trade if he will seek to amend the Companies Acts to provide that companies must send copies of their annual report to shareholders at the same time as they are filed at Companies' House.

No. The director's report is already required to be sent to the shareholders not less than 21 days before the meeting at which it is to be laid before them. While the periods for laying reports before shareholders and delivering them to the Registrar are the same, it is extremely unlikely that such reports will be delivered to the Registrar before they have been sent to shareholders.