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Auditing of Management Company Accounts

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  • 13-06-2007 12:51pm
    #1
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,279 Mod ✭✭✭✭


    A quick query- what would the situation be whereby a certified accountant who has been certifying a Management Companies accounts for a number of years purchases a unit in a development and becomes a member of the Management Company, of whose accounts they are certifying?

    Should they be allowed to continue certifying the company accounts (and charging the going rate), or should the Management Company seek a new accountant?

    The accountant in this case, since purchasing (and living) in the complex has become quite vocal about what the Management Company should or should not be doing regarding its expenditure (gardening, window cleaning, general upkeep has all been massively scaled back, and commercial vehicles are being allowed to use the car-park gratis).

    Shane


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    #2
    Borzoi
    Registered Users Posts: 2,876 ✭✭✭Borzoi


    In general whoever Audits accounts has no direct input over the activity of any company - that's left to the directors. So I fail to see, the connection between your auditor and the level of service provided to the residents.

    I think, now that the Auditor is in effect a shareholder in ???? ManCo, he probably shouldn't continue to Audit the accounts. Just to be on the safe side


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    #3
    antoinolachtnai
    Registered Users Posts: 9,776 ✭✭✭antoinolachtnai


    I think you are very lucky to have this guy on board. He might seem like a pain, but I think he will be very beneficial to you.

    There are rules about who can audit a company, but I can't remember whether what you describe is allowed. An audit is partly carried on on behalf of the members, so there isn't necessarily a conflict of interest. Personally, I'd avoid it if I were the accountant (I'm not an accountant, to clarify). But if he feels happy enough doing it, and it isn't against the rules, and everybody else is happy, I'd leave it the way it is.

    If he were a director or secretary, that would be a different matter.


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    #4
    Victor
    Registered Users Posts: 78,299 ✭✭✭✭Victor


    I suspect there may be a problem on the impartiality front. I'm sure the last issue of Phoenix Magazine had choice words for an auditor who was also a shareholder.

    A word with the relevant accountancy body or the Office of the Director of Corporate Enforcement might be enlightening. http://www.odce.ie/

    The worst case scenario would be an auditor being in collusion with a director or manager.


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