Sec 261: Auditor’s Statement

(1) What is an Auditor’s Statement?

Under Companies Act 2016 s.261, if a company is not required to lodge its financial statements with the Registrar, it must instead lodge an auditor’s statement signed by the company’s auditor. The statement must say:

(a) whether proper accounting records/books were kept;
(b) whether the financial statements were audited in accordance with the Act;
(c) whether the auditor’s report had any qualification/opinion under applicable auditing standards or any comment under s.266(3), with particulars; and
(d) whether, at balance-sheet date, the company appeared able to meet its liabilities as and when due. Breach attracts fines. SSM+1

(2) Who is an Approved Company Auditor?

An approved company auditor is a person approved under s.263 to act as auditor for the purposes of the Act (the term appears in the Act’s interpretation and throughout Part III). Approval is granted by the Minister charged with finance (delegated in practice to the Accountant General/MOF) if satisfied the applicant is of good character and competent, and upon payment of the prescribed fee. Approvals run for two years unless revoked or made subject to conditions; applicants must be chartered accountants (Accountants Act 1967). It is an offence to act as auditor or prepare reports required by the Act without such approval. SSM

Key cites to remember:

• s.261 Auditor’s statements (content + penalty). SSM+1
• s.263 Approval of company auditors (who approves, criteria, duration, delegation). SSM

Short notes for exam

Auditor’s Statement (CA 2016 s.261) — Short Notes

When required: Company not lodging full FS must lodge an auditor’s statement with Registrar.
Signed by: The company’s external auditor.

Must state (4 essentials):

1. Proper records kept;
2. FS audited in accordance with the Act;
3. Whether the auditor’s report had a qualification/other comments (give particulars);
4. Whether, at year-end, the company appeared able to meet liabilities when due.

Why it exists: Gives a minimum assurance signal to users/regulator when full audited FS aren’t lodged.
Exam cue words: “Records kept • Audited as required • Any qualification • Solvency indication”.

Common exam pitfalls (1-liners)
Don’t confuse auditor’s statement with the auditor’s report on FS.
“Approved company auditor” ≠ any MIA member; needs MOF approval/licence.