Co-operativesUK has obtained written confirmation from the Financial Services Authority that it would not seek to prosecute co-operative societies for failure to audit their interim accounts, unless it was considered in the public interest.
Under the existing Industrial and Provident Societies Act, societies wishing to produce interim accounts in addition to their annual accounts must have them audited. There is no such requirement for companies, so societies are unfairly disadvantaged.
'The reason co-operative societies produce interim accounts is to be comparable to companies and because it is good practice to be transparent,' explains Helen Barber, Head of Legal Services at Co-operativesUK. 'Up to now, societies have had to have their interim accounts audited, which not only creates an additional administrative burden, but a financial one too.'
However, Co-operativesUK has received written confirmation from the FSA that they would not seek to prosecute a society for a failure to audit interim accounts, unless it was considered in the public interest to do so.
'Working closely with the FSA in the interests of our members, Co-operativesUK has obtained an assurance that societies considering not auditing their interim accounts can do so without fear of being prosecuted,' says Helen.
'Co-operativesUK has forged a good working relationship with the FSA and we are delighted that our active engagement with them has produced such a positive result for our members and societies.'
The FSA assurance follows on from the recent publication of a Treasury consultation document highlighting proposals for a legislative reform order to update certain aspects of society law, one of which will be to remove the requirement for societies to have their interim accounts audited.
The proposed changes set out in this document reflect the issues raised by the sector following the comprehensive consultation carried out by Co-operativesUK on its behalf. Co-operativesUK will be working closely with the Government and its co-operative members over the coming months to make sure the proposed legislation fulfils the requirements of the sector.