What provisions of the Companies Act are Bertie, Angela, and Mainbrace not complying with?

Companies Act: Companies Act is being in the use of corporations to regulate the business decision and policies regarding human resources management and legalization of the business operations.  Companies Act is equally supported in many countries around the world. In the UK, companies act was introduced in 2006 to regulate and govern companies law. The prime objective of this act is to simplify and modernize company law to codify direct duties. Companies act project information regarding the key responsibilities of the corporate leaders such as directors of the company. Moreover, it provides rights to the investors or shareholders of the company. Mainly companies act is developed to ensure easiness in the internal management of a company with a flexible workplace hierarchy of control at different managerial positions.

·         Bertie, Angela: CA 171, the duty is acted in the power regarding an act where the person is acting through the constitution of the company and it’s supposed like a company director, however,if the Angela along with the Bertie are those people that run a business thus their responsibilities are also registered themselves by the directors of the company.

The CA 172 duty is a reason to exercise the skills and care along with the diligence of the company director which is also required to act professionally as well as it would also take the dealing and reasonable dealing by the business.

·         Mainbrace: CA 133 are those members registered by the company and it should also be registered by the company house involving the company members where theshareholders likeBertie’s father who also been registered like Co-owner in thedifferent businesses through providing the various capital. Thereforethe company also created the default by complying sectors in the offense which is done through the company as well as each officer of the company.

a)      What should they do as a matter of urgency to correct the situation?  

The situation which would also be supposed through the Bertie, Angela along with the Mainbrace Ltd    in the method to fix their positions        

Angela and Bertie which required to register themselves like the main directors of the company and they would also take responsibility where the personalities that run the business as well as create the various decisions. They also need to require the professionally buy the auditor as well as ensure an account of the company which has been recorded by the register of companies and avoid the serious actions which took againstthe company along with members.                

According to the case scenario, Bertie Bracewell and Angela and their families are the main directors of the company therefore legally they are responsible to make contracts and have operations in the favour of the business. Although, the situation represents that they are not complying with the new rules and regulation of employment and human resources management system in the company as a result of which they may be contacted for breaching company’s act and many other relevant Act regarding corporate management policies. Considering the situation the best possible option to correct this situation is to take external assistance from legal advisory companies and auditing firms to overcome the situation and introduce new policies for the support of business expansion and management in the market.

b)     What does Cicero Ltd need to do to rectify the situation?

The Cicero Ltd of the company which is under thecircumstances that arenegligent by the company and he does not have qualified the accountant which prepare the various account properly thus for this there is no ledger as well as has no double entry however the company also been the trading in three years without the audit regarding the company interest as well as its members which could also be at risk.

A failure of an audit occurs in a situation when the auditor’s report gives the judgment that the accounts of the client company are correct when they are not. Audits are not a routine process, in an audit, the auditors do not examine every account, instead only highly risky accounts are brought to question, and there is a possibility that many errors might have been overlooked. When the client and auditor know each other on a personal level, there are high chances that the auditor would be reluctant to report errors in the accounts as it might then put that friendship on stake.

Who is responsible for ensuring this is properly dealt with?

The CA 174 Duty is responsible for ensuring this because to exercise reasonable care, diligence as well as the skill of thedirectors that are running the business and also act as the wisely for benefits of the business plus ensure the running business. The transaction which is professionally done along with the accounts of a business which is recorded as well as declared by the house of companies.

The reputation of auditors can be improved by the elimination of incentives that were made for the encouragement of self-interest. There should be a different system for paying auditors. Schwarcz suggests “using public funding to pay auditors”. However, by this method, another form of government regulation is made that is not efficient at all. Owing to the reason of agency, a problem of conflict of interest would always be there, for as long as the auditors are getting paid. There are flaws in the fundamental system of auditing. The insurance of financial statements offers an alternative model; it has the aim of aligning the motivations of auditors and managers with the investors.

c)      By improving the position of Cicero Ltd, what advantages will this bring?

It is securely and beneficially for thecompanies which havethe accounting record for thedifferenttransactions and it could also create where thecompanies givedifferentadvantageslike;

·         It would also guide the directors which also createsan effective accurate and powerful decision all the time.

·         By having the correct record of the different expensesfor a company where thepartner would also able and claim the tax return, as well as the company, could also deduct the various expense from the profit thus it does not pay the higher tax.

·         By auditing,the term would also correct records and it would also prevent tax auditors from the different decisions regarding the estimation as well as it could also put into the company for unfair situations.

d)     Why might Eric Chopper not be keen to rectify the position?

Eric Chopper is also not a fully qualified accountant in the company. However, the majority of his duties are requiring qualification and field specific knowledge. His little knowledge can cause issues for the accounts departments as it happened in the given case scenario. In this case, Eric Chopper claimed that the company do not need to prepare account books and statements with the double entry system. Instead, he paid emphasis on the bank balance of the company. Eric Chopper will not be keen to rectify this position as in his views company is doing well without the proper auditing and double entry system for the records of the company’s transactions.           

Conclusive, the Eric Chopper is not motivated for the correction of positions along with the different reasons like;

·         An order which would not be revealed the misstatements along with thus there the losing possibility for his positions

·         Probably the company is embezzling which does not want and it could not be discovered like the inventory count of sheets which is thrown always as well as no can convict him.

e)      What will be the key points Tickitt & Run will have to explain about auditing standards?

Tickets and Run is theadult form that is also accepted the work for the Cicero as well as Mainbrace of the Ltd Companies along with it is also provided by the legal solutions for thedifferentsituations.There are the main key points which would also Tickitt as well as Run firm explained by the Cicero and Mainbrace Ltd company standards.

At times the lack of professional skepticism is due to time constraints. When final results are required on short notice, then quality gets compromised. Now obviously when the time is pressing the auditor’s objective would shift from doing quality work to finishing the work within time. There is a possibility that Tenon gave time very little time for the accomplishment of audit that out the auditors under pressure and that became the cause of misconduct.Now in such cases, the auditors may be only left with an option to surrender when the time is too much pressing. The auditor in such cases would only act for their interest and the interest of the company would then be on stake.

f)       How will Financial Reporting Standards, broadly, affect these businesses?

The complex corporate structures could make it easy for companies to not reveal they're true financial status. A company might be operating in many layers and there might be many sources of funds. The entity then becomes less transparent and the audit becomes difficult. The audit failure can be the cause of negative reactions in the market, and result in the reduction of the wealth of shareholders. If the decisions of competitors are based on the false statement of the leaders of the market, involved in the failure of the market it could then affect the whole industry.

The insurance of financial statements offers an alternative model; it has the aim of aligning the motivations of auditors and managers with the investors. To minimize the cost of claims there should be the hiring of auditors, just like investors. So incentives would be given to the auditor to provide work of high-quality. There is an alignment of interest of everyone. The gap of expectations that is the difference between the responsibilities that the auditors believe they have and what users believe them to be should be narrowed.

How would you go about explaining to entrepreneurial management the need for all auditing and accounting rules?

A business entrepreneur is somebody who builds up a plan of action, gets the important physical and human funding to begin another endeavor, and operationalizes it and is liable for its prosperity or disappointment. Note the stress of the expression answerable for progress or disappointment as the business person is unmistakable from the expert chief as in the previous either contributes their own assets or raises capital from outside sources and subsequently assumes the fault for the disappointment just as receives the benefits if there should be an occurrence of accomplishment though the last mentioned or the expert administrator carries out the responsibility and the work doled out to the person in question for a money related thought. At the end of the day, the business visionary is the daring individual and a trend-setter notwithstanding being a maker of new undertakings while the expert director is just the agent. For a business visionary, truly bookkeeping and fund are just devices to achieve three key undertakings:

(1)   To make forecasts about what's to come;

(2)   To assist you with making increasingly viable responsibilities of time, vitality and cash to pull in clients and convey merchandise and enterprises at a bigger and progressively productive scale; and

(3)   To gauge and reconsider your advancement, so you can compensate and energize gainful practices, report progress to outsiders, and change headings when fundamental.

Developing business people must figure out how to get a handle on bookkeeping and account instruments, instead of simply build up the capacity to disgorge equations and recreate budget reports in deliberately controlled conditions, so as to meet these three destinations.

Financial accounting or Bookkeeping is also important as much as auditing is determined in the entrepreneur. It assumes an indispensable job in maintaining a business since it causes you track salary and uses, guarantee statutory consistence, and give speculators, the board, and government with quantitative money related data which can be utilized in settling on business choices.

There are three key budget summaries created by your records.

(1)   The salary proclamation furnishes you with data about the benefit and misfortune

(2)   The accounting report gives you an away from on the budgetary situation of your business on a specific date.

(3)   The income proclamation is an extension between the salary articulation and monetary record and reports the money created and spent during a particular timeframe.

It is basic you keep your money related records tidy and modern in the event that you need to keep your business above water. Here are only a couple of the reasons why it is significant for your business, huge or little.