Page 189 - F1 - AB Integrated Workbook STUDENT 2018-19

Law and regulation governing accounting

Consequences of compliance failure

3.1 Consequences of compliance failure

 Failure to keep proper accounting records or to prepare regular financial
statements that give a true and fair view are both criminal offences.

 Directors can be fined for failure to comply.

 Should the company be listed, it may have its shares suspended by re stock
exchange.

 There may be further problems with the tax authorities if records are found to be
inaccurate. The company may be guilty of tax evasion, which is illegal.

 If the poor accounting records mean that the financial statements do not show a
true and fair view, the company’s auditors may give a qualified audit report
which can damage the company’s reputation.

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