8 kwietnia 2016
Doing business in Poland. Audit of financial statements
In accordance with Article 64 of the Accounting Act the annual consolidated financial statements of groups of companies or partnerships as well as the annual financial statements of the following are subject to audit and publication, provided that they continue their operations:
- banks, insurance and reinsurance companies;
- credit union
- undertakings operating under the legal regulations on the organisation and operation of pension funds;
- joint-stock companies, save for companies under organisation as of the balance sheet date;
- other undertakings that met at least two of the conditions listed below in the preceding financial year for which the financial statements were prepared:
- average annual employment calculated as full time jobs amounted to no less than 50 people,
- total balance sheet assets at the end of the financial year amounted to no less than the Polish currency equivalent of EUR 2,500,000,
- net proceeds from sales of products and goods and from financial operations for the financial year amounted to no less than the Polish currency equivalent of EUR 5,000,000.
In accordance with Article. 3 Section 1 point 45 of the Accounting Act consolidation is understood as combining the financial statements of undertakings comprising a group of companies or partnerships, by aggregating the respective items in the financial statements of the parent and subsidiary undertakings, taking into account the necessary exclusions and adjustment.
Consolidated financial statements are the financial statements prepared for a group of companies showing the presentation of each company separately, intra-group transactions and the situation after consolidation. Such reports are useful primarily for the owners of the group, which depends on reviewing the whole of the situation in the group. The obligation to prepare consolidated financial statements is regulated in the Chapter 6 of the Accounting Act. The provisions of Article. 55-63d define the purpose, scope and methods of reporting.
Annual consolidated financial statements of the group include the data of the parent company and its subsidiaries at all levels, regardless of their geographical location, summarized in such a way as if the group was one entity.
The consolidated financial statements consist of:
- the consolidated balance sheet;
- the consolidated profit and loss account;
- the consolidated statement of cash flows;
- statement of changes in consolidated equity capital;
- additional information, including introduction to the consolidated financial statements and notes and explanations.
A report on the activities of the group is an integral part of the annual consolidated financial statements. It must included information about shares held by the controlling company, entities in the group and persons acting on their behalf.
Parent company which has its head office or place of management in Poland is required to prepare consolidated annual financial statement.
The parent company may not present consolidated financial statements if the required identified in Article 56 will be fullfiled
The consolidated financial statements do not need to prepare also when the parent company of higher level owns 100% of the unit, where they are not taken into account the shares in the entity held by members of its administrative, management or supervisory law or in respect of the obligations set out in its memorandum or articles or when the parent higher level has at least 90% of the shares of the unit, and the other shareholders of the entity approved the decision not to consolidated financial statements.
This exemption can be applied in cases where the two of the following conditions:
- the parent company of higher level will cover the both consolidated subsidiary of the parent company which is not prepared consolidated financial statements and all of subsidiaries to be consolidated by the parent company;
- manager of the parent company which not preparing the consolidated financial statements fulfill the obligations to submit consolidated financial statements and the consolidated annual report of the parent company;
- the parent company which not preparing the consolidated financial statements disclose in the notes listed in the Annex to the Accounting Act.
The auditor in its examination verifies the documentation on the basis of the facts and controls processes related to accounting and reporting organizations then before formulating opinions, recommending necessary changes and help find solutions to problems identified.
The examination shall take determine whether the financial statements as a whole and form the basis for the preparation of accounts are free of irregularities involving the omission or distortion of the relevant information and whether it can be regarded as reliable the information contained in this report.
8 kwietnia 2016