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Can new directors challenge accounts signed off?

New directors want to challenge previous years accounts

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A property management company have appointed a new managing agent, (my client) New directors were appointed and the old directors have resigned. The new directors do not trust the previous directors and want to challenge previously signed off accounts. Can they do this? If they find anything unto wards, what then? Who pays the cost? Any advice gratefully received, as always.

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By lionofludesch
17th Sep 2021 18:28

They can. If there's something wrong, it depends what and why it's wrong.

Who pays ? Them. Unless there's been some major error on your part, in which case it's you.

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By Paul Crowley
17th Sep 2021 19:12

I read this as if you have not yet prepared accounts
Your client the managing agent was not involved with the prior period

It is usual for the managing agent to prefer to pick the accountant, so when the property manager changes, so does the accountant.

Quite simple really
The Service charge company picks up the cost of any work done, effectively the cost is shared out amongst all the company members

This is probably going nowhere productive

I tend to use the term Service charge company for the company that just charges its members and pays the bills

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By [email protected]
17th Sep 2021 19:58

The new directors want to question the year end accounts (31/03/2020) prepared by the previous accountants. I have been asked to prepare the latest year end accounts for 31/03/2021, figures 01/04/2020-31/01/2021 have been passed to me from the previous managing agent and 01/02/2021 - 31/03/2021 have been compiled by my client who took over as the managing agent from 01/02/2021.
The new directors want to 'clarify' the overspend for the 2020 accounts that have already been agreed by the previous directors and submitted to Companies House.
I feel it's more of a grudge and I suppose the outcome depends on whether they find anything wrong as to the next procedure, but as it stands if they want to have the accounts checked they can but it's at their own cost, right?
Would they need to get the other non director residents to agree to this as it would have a cost, or could they as directors instruct it? Many thanks

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By Paul Crowley
17th Sep 2021 20:10

I do a lot less now but used to do over 100 of these
I agree that when all changes the new directors always want to stamp their feet

Not your issue to mess about informing the members
Leave that to the Property managing agent

But the time you are likely to spent will be bigger than future years when you have just the one system and an agent that has dealt with the entire year

If the directors want the prior year reworked you will need prior year records
Make sure you are comfortable with your fee for the reworking and it is agreed up front with the opportunity to increase should some conflict arise

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By indomitable
24th Sep 2021 16:01

Of course they can if they believe they are inaccurate.

We have re-done accounts and tax returns for clients from prior year when they didn't trust the accounts.

It's more common than you think.

Who pays the costs is more tricky depends on whose at fault and whether is was deliberate.

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