Out of date cheques

A client recently contacted me to tell me that their bank had cashed a cheque that was over 2 years old. On questioning this they were told that the bank no longer applies the 6 month cut off on cheques.

We checked the legislation that states that cheques are actually valid for 6 years, although banking practice has been to refuse them after 6 months.

We have always written off old cheques for clients when doing their accounts, but it would now seem that we should be keeping them in the accounts for 6 years.

This could have implications for our audits particularly, as theoretically could we be overstating bank balances and should look back over 6 years to identify any written off amounts?

Also, at what point should we reallocate these amounts to creditors rather then outstanding cheques?

Any help or advice would be appreciated.
Philippa Keane

Comments
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6 years

Andy Reeves |
Andy Reeves's picture

I am wondering......

AnonymousUser |

Stop the cheque at the Bank

jamesbarton |

Returning cheques

David160 |