Our goal is to provide affordable management accounting for medium to low activity client entities to assist them in complying with local accounting information Regulations and to enhance the “substance” of the entities being served.
Changes in the Regulations relating to the maintenance of accounting records have recently been enacted to bring this area of corporate governance into line with OECD member recommendations. In general the amendments require juridical entities to keep accounting records in sufficient detail so as to allow for the provision of annual accounts. These requirements in more detail can be summarised along the following lines:
1. The entities must keep proper books of account including, where applicable, material underlying documentation including contracts and invoices and should reflect details of-
a. all sums of money received and expended and the matters in respect of which the receipt and expenditure takes place; and
b. all sales and purchases and other transactions and the assets and liabilities of the entity.
2. (i) The books of account should –
a. correctly explain all transactions,
b. enable the financial position of the entity to be determined with reasonable accuracy at any time, and
c. allow financial statements to be prepared.
(ii) depending upon the jurisdiction the books of account which the entities are required to keep must be preserved by it for a minimum period which is generally not less than five years from the date on which they are prepared.
3. In most cases the books of account must be kept at the registered office of the entity or at such other place or places as the directors/managers/trustee(s), council members etc., think fit but in such cases their location must be notified to the registered agent or his equivalent in writing and the registered agent or his equivalent must be notified of any changes in the location of these records.
4. In most cases there is a substantial fine attaching to the entity and/or its managers and/or its registered agent if they knowingly and wilfully contravene the requirements.
Practitioners and managers should be aware of these requirements and familiarise themselves with the specific requirements of the regions in which they operate.
In addition, there has been a trend for some years now towards greater transparency in corporate governance and it is entirely likely that within the near to medium term (say within 5 years) the serious financial centres that provide tax exempt services will require that all juridical entities organised and overseen by them produce annual financial statements. This trend may be more of a help than a hindrance to those who use or recommend exempt companies in their corporate structures. As the AML/CFT regulations continue to develop banks and brokerage companies are increasingly demanding more and more information from their clients including:
- Nature of business
- Expertise of the board of directors
- Volume of business
- Volume of transactions
- Location of business
All of these information requests can be easily accommodated in a simple set of management accounts produced on a consistent basis from year to year.
Given the potential liabilities that directors’ face and the reputational damage that the failure to produce company accounts implies CHCL is proud to offer basic corporate accounting and preparation of management accounts to all clients. We believe that the directors, or their equivalent of juridical entities should be ensuring that annual management accounts are produced for those entities which they manage.
Up until now it is interesting to note that the provision of professional director services has remained unregulated in almost all regions. This may always remain the case due to the fact that in practically all regions private “local” activities, when operated through a corporation, are managed by the entrepreneurs themselves and to regulate local entrepreneurs would have domestic political and practical consequences.
Nonetheless, while unregulated, professional directors still have a higher standard of care attaching to them than owner/managers and the reputational risk attaching to the activities of the companies that engage their services is considerable.
We believe that:
- Basic accounting and management accounts are desirable;
- The generation of such accounts enhances the reputation of the service provider and the user.
Through our full service office located in the US we can provide our clients basic bookkeeping and management account preparation services.
Our team of bi-lingual (English/Spanish) accountants have a strong knowledge of available accounting systems and will design and produce basic management accounting systems suitable for the different business disciplines that our varied client base require.
For further information about our basic bookkeeping services please contact your local CHCL representative or e-mail your enquiry to info@chclfiduciary.com.
Disclaimer The information contained herein is for general information purposes only. The information is provided by RBC FINANCIAL GROUP and every endeavour has been made to maintain it in a current and proper state. We offer no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability of it with respect to the information, products or services contained herein. Any reliance placed by the reader on this information is therefore placed strictly at his or her own risk. In no event will RBC FINANCIAL GROUP, its members, associates, management or employees be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this material.
