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-operatives UK.
“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. Co-operatives UK has obtained an assurance that societies considering not auditing their interim accounts can do so without fear of being prosecuted.”
She added: “Co-operatives UK has a good working relationship with the FSA and we are delighted it has produced such a positive result for our members and societies.”
The FSA assurance follows the recent publication of a Treasury consultation document highlighting proposals for a legislative reform order to update aspects of co-op law, one of which will be to remove the requirement for societies to have interim accounts audited.