Notes to Financial Statements

I can’t think of a good title to put for the post, so I just put this. Anyway, I am going to talk about work, therefore this title is appropiate since it is something that I come across everyday.

I have been in my current firm for about 1 year 4 months now. It was on yesterday and today that an inconsiderate colleague  decided to break my co-worker and my record by really making us angry and making us have a staff meeting about this  inconsiderate colleague’s work attitude.

Most of you who are working in the accounting/finance, audit and taxation field will know that a full set of financial statements as defined under the Financial Reporting Standards (FRS) includes:-

1. Balance Sheet

2. Profit and Loss Account

3. Statement of Changes of Equity

4. Cash Flow Statements

5. Notes to Financial Statements

 

Notes to the financial statements are details and information shown in words and comprative figures that cannot be shown in the summarised Balance sheet, Profit & Loss Account and Cash Flow Statement. As a result, you will always see this line, “ The notes to financial statements are an integral part of the financial statements”

As a professional preparing a Company Tax Computation, details on various expenses, especially medical, legal and professional fees and motor vehicle expenses, together with fixed assets added and disposed in the financial year are the basic schedules that are needed. Therefore, it is considered a basic requirement I must say.

Yet, this colleague don’t seem to know what is the definition of  financial statements. He did it and passed to us for preparation of tax provision purposes without doing the Notes to the Accounts. He can tell you it is not required or its immaterial. It has always been like that since I have worked on his assigned cases for the past year. The schedules needed are also not compiled or done. Our work is always delayed because of his incompetence. Our department knows that this person has been carrying the boots of one of the audit partners.

My 2 tax partners were surprised that we snapped and decided to hold a meeting with me, my manager and their son, who is one of the audit partners as well. We brought up our views in the meeting and fortunately justice prevailed as their son also agreed that the fixed assets schedules and hire purchase schedule need to be done before the tax department could proceed with the work. However, I am a little disturbed by what their son said during the course of the meeting, which I feel is not right to disclose here. I just told my manager that we should learn to speak up for ourselves if we think it is not right and always protect ourselves from the dirty game of office politics.