Law on filing false accounts

[adam1985]

Hi all,
I was wondering what the law says about deliberatly filing false accounts on companies house in order to make an organisation look financially feasable???

Any advise will be much appreciated,,,,

[Stretchy]

Fraud maybe?

[Batra Ventures UK Limited]

Probably fraud? Therefore criminal offence?

[adam1985]

Basically, I have seen actual chartered accounts which show a minus balance of 650k, 290k of this was assigned to a directors loan account.

Weeks later i took it upon myself to check out companies house, after paying my pound i found that there filed accounts only 3 weeeks old showed another story with no directors loan no overdraft or debt of any kind...

A current bank balance of £200 with no profit for the year but no dept either.

In my opinion they have done this to maintain and enable them to continue opening and not paying credit accounts for material's etc.

TW*TS TRICK IF YOU ASK ME AND THE ACCOUNTANT NEEDS SHOOTING FOR TAKING PART IN THE WHOLE THING - MAYBE I WILL PLACE A COMPLAINT IF ANY CAN ADVISE ME ON THE CORRECT WAY OF DOING SO..

[Williams lester]

Perhaps the accounts you saw were a draft version, and the DLA has been written off?

[Batra Ventures UK Limited]

Wha are the conditions under which DLA can be written off?

[elainec100@cheapaccounting]

Basically, I have seen actual chartered accounts which show a minus balance of 650k, 290k of this was assigned to a directors loan account.

Weeks later i took it upon myself to check out companies house, after paying my pound i found that there filed accounts only 3 weeeks old showed another story with no directors loan no overdraft or debt of any kind...

A current bank balance of £200 with no profit for the year but no dept either.

In my opinion they have done this to maintain and enable them to continue opening and not paying credit accounts for material's etc.

TW*TS TRICK IF YOU ASK ME AND THE ACCOUNTANT NEEDS SHOOTING FOR TAKING PART IN THE WHOLE THING - MAYBE I WILL PLACE A COMPLAINT IF ANY CAN ADVISE ME ON THE CORRECT WAY OF DOING SO..

With respect - there are no such thing as chartered accounts.

Do you mean the accounts were prepared by a chartered accountant. If so and you want to make a complaint then look at the ICAEW site for the procedure for this.

You will need to document the facts as to the nature of the complaint.

Have you been provided with the reason for the change in the figures?

[adam1985]

Yes all prepared by a chartered accountant.

I have actually just looked into this morning and i can get my hand on both versions which are dated and signed the same.

The other reason they could have done this is so they dont look as trading insolvent to companies house as surely they would be classed as some sort of 'concern'.

Im not sure what to do as whatever happens it would not affect me personally in any way, i just feel strongly for the poor organisations that it will affect.

[elainec100@cheapaccounting]

Companies house would not class a company as insolvent - not their role!

Like everything - anyone looking at accounts needs to be aware of what they contain and how to read them correctly.

In all likelihood someone would can read accounts would pick up any underlying issues that may exist in the business - part of any professional due diligence.

It is only Abbrev. accounts at Co House anyway.

[Zeno]

To be honest, so long as the accounts are in the correct format, signed in black and with the registration number on the balance sheet, Companies House won't care what they actually say. Not their job y'see...

So I here you asking, what is the point? It's a very good question...

[kontracta_com]

Dredging up what I remembered from my undergraduate degree, false accounting is an offence under s17 of the Theft Act 1968... dredging up what I've found on Google it is defined as

"(1)Where a person dishonestly, with a view to gain for himself or another or with intent to cause loss to another,—
(a)destroys, defaces, conceals or falsifies any account or any record or document made or required for any accounting purpose; or
(b)in furnishing information for any purpose produces or makes use of any account, or any such record or document as aforesaid, which to his knowledge is or may be misleading, false or deceptive in a material particular...."



Dredging up what I did learn from my degree is that I'm not a lawyer and would never, ever purport to be so please don't consider this to be advice of any kind (for all I know this part of the Act may heave been superceded even though the TA'68 hasn't). Although the Statute says what it says, there will be so much case law attached to it that it would be one for the solicitors and police if you wanted to do anything - and prosecutions are rare given the burden of proof required.


It is a distinct possibility that the accounts will have gone through a number of draft stages and that the ones at Companies House would be the final ones signed off by the directors and accountants - with adequate support for all journals. It would be (career) suicidal for the accountant to do anything else.


However if you do want to investigate further then go through the ICAEW first as they will have experience of these complaints. Going straight to a solicitor or the police wouldn't be an option in my opinion.

[Tom McClelland]

Based on a straw poll of the companies I've checked (OK a limited sample of about 10), companies house accounts are about as much use as a chocolate fireguard.

They add up, and that is about all that can be said for them. Some of them are so transparently dishonest (based on other facts that I know about the company in question) as to be hilarious. Others have startling ommissions, like the complete lack of any share capital in the accounts (though they still balance, so presumably SC has been rolled up into reserves, or something)

I have a hearty dislike for useless things which have a semblence of being useful. In their current form we'd be better off without the CH AA. In my opinion their purpose would be better served if people had to openly file the CT calculation schedules which have to be prepared anyway, so it isn't as if that would be extra work. People might whinge about "privacy" but isn't that something that you need to give up a little of if you want limited liability?

[adam1985]

Thanr advise every one, i think i will leave it as it doesnt effect me personally..

If it is as bad as i imagine it wont be long before they sink, and if i am right they will probably be personally liable for the Directors loan account.
(I HOPE ANY WAY AS IT WILL TEACH THEM A LESSON).

[and180y]

.......................signed in black...

With the black pen that none of the shops ever seem to sell, it's a conspiracy. :eek: :D. Why do they specify black when most pens are blue!

[Zeno]

With the black pen that none of the shops ever seem to sell, it's a conspiracy. :eek: :D. Why do they specify black when most pens are blue!

Because black shows more clearly on scanned documents. Or they have a cartel going with Bic & Parkers to slowly remove black pens from circulation then we will be at their mercy to be able to submit documents...(can anyone hear an evil laugh?)

If you really want some fun, phone up CH and ask them to define what "paper" is.

[elainec100@cheapaccounting]

If you really want some fun, phone up CH and ask them to define what "paper" is.

or what a company is :|:|:|

I think the most common misconception is that Co House and HMRC work together.

Nope - not the case.

There are two huge government departments handling some similar data - a topic for public sector spending cuts maybe :|:|:|:|

[wizzard]

or what a company is :|:|:|

I think the most common misconception is that Co House and HMRC work together.

Nope - not the case.

There are two huge government departments handling some similar data - a topic for public sector spending cuts maybe :|:|:|:|

Imagine the cost savings :)

[Zeno]

Imagine the cost savings :)

Cost savings your arse:-

Redundancy/severance etc packages X no. of Companies House Staff

+

Recruitment of new HMRC staff

+

Training of new & old HMRC staff

+

Development & installation of new systems

+

Futher training for all staff on use of new systems

+

New bonus structure for senior HMRC managers

+

Expensive outside consultants to project manage the lot

= We will be worse off both financially and the fact that nothing will work at all.

[elainec100@cheapaccounting]

the fact that nothing will work at all.

So no change then :D:D:D:D

[Zeno]

So no change then :D:D:D:D

I don't know, Companies House ain't so bad compared with HMRC.

[David Griffiths]

I don't know, Companies House ain't so bad compared with HMRC.

I think that Companies House is pretty good actually. Their systems are a lot more reliable, and once we can file accounts using XiBRL (or whatever) and avoid their dreadful abbreviated accounts package) then they will be even better

The main whinge that people have about Companies House is their strict imposition of penalties - even though they are warned about this before the due date. I have no sympathy at all.

[Zeno]

I think that Companies House is pretty good actually. Their systems are a lot more reliable, and once we can file accounts using XiBRL (or whatever) and avoid their dreadful abbreviated accounts package) then they will be even better

The main whinge that people have about Companies House is their strict imposition of penalties - even though they are warned about this before the due date. I have no sympathy at all.

We had it slightly worse up here for a while due to the differing implementation dates for charities using the CA 2006. Many sets of accounts prepared properly were rejected & presumably vica versa sometimes with fines flying about accordingly.

This is no longer an issue with things now running fairly smoothly although I have mixed feelings about XiBRL (?).

Of course, up here we also have OSCR which is as much use aas tits on a bull - they mainly confine themselves to Companies House like trivialities on the format of the accounts but have not yet taken to fines. Doubtless The Charities Commision is much the same.

[elainec100@cheapaccounting]

I don't know, Companies House ain't so bad compared with HMRC.

I think that Companies House is pretty good actually. Their systems are a lot more reliable, and once we can file accounts using XiBRL (or whatever) and avoid their dreadful abbreviated accounts package) then they will be even better

The main whinge that people have about Companies House is their strict imposition of penalties - even though they are warned about this before the due date. I have no sympathy at all.

But what value do they add?

They check you have filed accounts (and they are vaguely in correct format)

They do not check quality, accuracy of accounts e.g. if balance sheet adds up and balances and we have all seen examples of where it doesn't.

They chase for late filing and strike off cos that have not filed an annual return.

So - good administrators really :|:|

What else do they do?

[Philip Hoyle]

Back to the OP's situation, my first thought is whether there are actually two companies/businesses here, perhaps with a very similar name, whereby maybe one company is a holding company of the other which is the trading company? To me, it sounds like the two different versions of the "same" accounts are just far too different - fair enough the loan account being written off in the final version, but that wouldn't affect the cash/bank balances which IIRC were also materially different.

I know I've been caught out like this a few times when trying to review company accounts on behalf of clients - sometimes you have to wade through several different companies to trace the group structure and work out the true status of the "group" and check the viability/security etc of the company that the proposed transactions will actually go through.

I'd suggest the OP first checks the company name again to make sure it is absolutely identical on both sets of accounts and then have a good read of the directors report and notes to the accounts to try to spot any group structure, related companies, etc. that may provide a valid reason for the apparent differences.

[David Griffiths]

But what value do they add?



They don't. But they aren't there to add value - they just administer a necessary evil of filing accounts and returns.

Given that it has to be done, their systems are streets ahead of the Revenue. Much less complex almost certainly but much more reliable.

[Zeno]

They don't. But they aren't there to add value - they just administer a necessary evil of filing accounts and returns.

Given that it has to be done, their systems are streets ahead of the Revenue. Much less complex almost certainly but much more reliable.

And to fee for the privilege of filing your annual return, don't forget that.

I wonder how long before HMRC realise they could charge fees for the filing of tax returns? Better not give them ideas...

[yorkshirejames]

It is only Abbrev. accounts at Co House anyway.

I was wondering whether this was the difference that the OP was seeing, that one set were the full accounts and the other set were the abbreviated ones? Granted, there seems to be so many differences that it probably isn't this, but I just wondered.