Annual Financial Statements
Annual financial statements are judged twice: once on whether they comply with the framework, and again on how long the audit takes. The second is decided almost entirely by the supporting file. Statements delivered without one produce an audit that stalls on evidence requests, which is why we assemble the file alongside the statements rather than afterwards.
1
Framework
Confirm which applies
2
Close
Year end adjustments
3
Prepare
Statements and notes
4
File
Assemble the evidence
5
Support
Through the audit
How We Prepare Them
01
Framework Determination
IFRS, IFRS for SMEs and GRAP impose materially different requirements, and applying the wrong one is expensive to unwind. We confirm the applicable framework and any funder or regulator overlay before starting.
- Applicable reporting framework confirmed
- Entity specific disclosure requirements identified
- Funder and regulator overlays established
- Prior year comparatives assessed for restatement
02
Year End Close
The adjustments that convert management accounts into statutory statements: depreciation, impairment, provisions, accruals and the deferred tax that most sets get wrong.
- Year end journals prepared and supported
- Depreciation, impairment and provisions assessed
- Accruals and cut off verified
- Deferred tax calculated and reconciled
03
Statement Preparation
Statements and notes prepared to the framework, with disclosure driven by a checklist rather than by last year template. Disclosure requirements change and copying forward is how omissions persist.
- Primary statements prepared to the framework
- Notes prepared against a current disclosure checklist
- Accounting policies reviewed rather than rolled forward
- Directors report and statutory content included
04
Audit File Assembly
This is the part that determines the audit timetable. Every balance in the statements is supported by a reconciliation and the underlying evidence, indexed so an auditor can find it without asking.
- Supporting schedule for every material balance
- Reconciliations cross referenced to the statements
- Source documents indexed and retrievable
- File reviewed for completeness before handover
05
Audit Support
We deal with the auditors so your team can continue running the business. Queries come to us, and where an adjustment is proposed we assess it rather than accepting it automatically.
- Audit queries handled directly
- Proposed adjustments assessed before acceptance
- Additional schedules prepared on request
- Final statements updated for agreed adjustments
What You Receive
- Annual financial statements prepared to the applicable framework
- Complete note disclosure against a current checklist
- Year end journals with supporting calculations
- Indexed audit file with a schedule per material balance
- Audit query handling through to sign off
- Final statements updated for agreed adjustments
Indicative Timeline
Preparation typically takes two to four weeks after a clean trial balance, longer where reconciliations were not maintained during the year. The audit file is built alongside rather than after, which is what protects the audit timetable.
- Framework confirmation and planning: two to three days
- Year end close and adjustments: one week
- Statement and note preparation: one to two weeks
- Audit file assembly: alongside preparation
Frameworks We Prepare Under
The framework follows the entity and its obligations, and each imposes different disclosure.
IFRS
Full IFRS for public interest entities and those whose funders or shareholders require it.
IFRS for SMEs
The reduced framework appropriate to most owner managed companies and private groups.
GRAP
Standards of Generally Recognised Accounting Practice for public entities and municipalities.
Modified Cash
Where a specific entity type or funder requires a basis other than accrual accounting.
Trust and NPO
Statements for trusts and non profit entities, frequently with funder specific disclosure.
Group Reporting
Consolidations with elimination schedules and component reporting for group audits.
Frequently Asked Questions
Can you prepare statements you will also audit?
No. Preparing and then auditing the same statements creates a self review threat that independence rules do not permit. Where we prepare, another firm audits, and we will tell you that up front rather than after engagement.
Which framework applies to us?
It depends on the entity type, its public interest score and whether funders or regulators impose a requirement. Most owner managed companies use IFRS for SMEs. Public entities use GRAP. We confirm before starting rather than assuming.
Why does the audit file matter so much?
Because it determines how long the audit takes and therefore what it costs. Auditors spend most of their time requesting and waiting for evidence. A file where every balance already has its supporting schedule removes the majority of that.
What if our monthly records were not reconciled?
Then reconciliation happens at year end, which is slower and more expensive but unavoidable. It is the single strongest argument for maintaining reconciliations monthly rather than deferring them.
Do you handle the deferred tax calculation?
Yes. Deferred tax is one of the most commonly misstated figures in smaller sets of statements, usually because it is rolled forward rather than recalculated. We recalculate and reconcile the movement.
Can you deal with the auditors on our behalf?
Yes, and it is usually the most efficient arrangement. Queries come to us, we assess proposed adjustments rather than accepting them by default, and your team is not pulled off operational work for weeks.
Related Services
This sits inside our Financial and Management Accounting practice. Related work: Independent Reviews to establish which engagement your statements actually require, and Taxation for the tax computation reconciled to the statements.
