Signing off Accounts

The current CIMA position is that if a company is exempt from needing an audit, then there is no reason why a CIMA member, acting as a reporting accountant should not provide a business mortgage reference. However, some lenders require a report prepared by a member of an auditing body and this is the client’s choice.

Under the Solicitors Regulation Authority (SRA) Accounts Rules, Client money accounts must be signed off by a member of the Institute of Chartered Accountants in England and Wales; the Institute of Chartered Accountants of Scotland; the Association of Chartered Certified Accountants; or the Institute of Chartered Accountants in Ireland. If you are a CIMA MiP providing services for a solicitor You should look at Rule12, “Obtaining and Delivery of an Accountant’s Report “which provides exemptions to the requirement of an accountant’s report and discuss this with your client.

CIMA Members in Practice may provide accountants’ reports for members of some but not all of the established travel and transport bodies.

You may provide accountant’s reports for ABTA member travel agents if they fall below the audit exemption threshold. You can do this if you:

1. Hold a current practising certificate; and

2. Are independent of the member travel agent.

The ATOL scheme exists to protect consumers if their travel organiser should fail. It ensures consumers are not stranded abroad or do not lose money paid to the travel organiser for holidays and flights. The ATOL Regulations require these businesses to hold a licence.

Accountants wishing to provide services to ATOL businesses are governed by the ATOL Reporting Accountants' (ARA) scheme which was developed by the CAA in order to help improve the standard of ATOL reporting and to provide assurance that financial information which is submitted on behalf of ATOL holders is accurate.

In order to act as an ATOL reporting accountant, you must be a member of one of the professional accountancy bodies approved by the Civil Aviation Authority (CAA) under the ARA Scheme. CIMA is not an approved body.

CIMA MiPs may wish to sub-contract any ATOL work or, if you have a practice that is large enough to have members of the scheme as directors, you may wish to check whether the CAA will accept a registration under the auspices of that individual.

IATA states that a reporting accountant, even those wishing to report on business that fall below the audit exemption threshold, must be members of a Recognised Accountancy Body (RBA). A RBA is an accountancy body that has been granted recognition under section 930 of the Companies Act 2014 and these bodies can authorise their members to perform statutory audits. Because the CIMA qualification does not include audit, CIMA cannot become a RBA and CIMA MiPs cannot, therefore, provide accountants’ reports for IATA members.

Estate agent accounts involving clients' monies must be examined and reported on by a qualified auditor. This is under the provisions of:

• The Estate agents act 1979, specifically section 14.

• The Estate agents (accounts) regulations 1981, specifically regulation 8.

This is the case even if the annual turnover of the business falls below the audit threshold. CIMA members are therefore unable to provide accountants' reports in such circumstances, even if they have been responsible for examining a client's accounts.

Lettings and Property Management Agents

Service charge accounts for property management are subject to one of two types of financial reports, depending on the lease and size/nature of the property/scheme.

CIMA members are not qualified to audit but are able to provide an external accountant’s report – a report on factual findings. This type of report is appropriate for accounts of businesses that fall below the audit exemption threshold, or, where deemed to be appropriate, subject to contractual requirements. CIMA recommends that Management Companies should discuss the choices available with their lessees and external accountants.

The Association of Residential Management Agencies (ARMA) and the Association of Residential Property Management (IRPM) merged in 2022 to become The Property Institute.

In 2019, the National Association of Letting Agents (NALS) rebranded as SafeAgent and continues to operate in the private rented sector, acting as an accreditation scheme for letting and management agents.

The Property Institute does not regulate for accounting for lessees’ service charge monies. To fill this void, ARMA (as was), the ICAEW and the RICS produced a joint technical guidance note Accountants’ Reports on Commercial Property Service Charge, , Tech 09/14BL.

If the lease allows a reporting accountant to report on the accounts, then there is no reason why a CIMA MiP cannot do this. It is, however, the choice of the client, who may be bound to an accreditation scheme. You should discuss the requirements of any overarching scheme with your client before confirming that you can undertake the work.

CIMA members may wish to explain to their clients the difference between the circumstances under which an audit is required by law and when a statement of factual findings (a reporting or external accountant’s report) is legally acceptable and confirm that CIMA members are qualified to provide such a statement.

CIMA recommends that you state the requirements for registration as a MiP which should give the client reassurance that you are regulated, you have PII, Terms of Engagement and AML supervision.

As a MiP, you can sign off club and charity accounts when the income is under £1 million, provided you use the term 'examiner' (do not represent yourself as the auditor).

Points to note:

• If the charity's rules state that an audit is required then it must be done by an auditor.

• If you receive no fee then you do not need to register as a member in practice. However, there are still risks in acting as an examiner, for which you could be held liable, so professional indemnity insurance may be wise.

In the UK, the Charity Commission advice line explains that for charitable companies there are two sets of requirements - those of Companies House and those of the Charities Commission. These rules currently prevent MiPs examining the accounts of a charitable company with an income above £1 million.

However, tests of audit are not completely straightforward. Members are advised to refer to the Charity Commission guidelines, in particular publications CC31 and CC32.

More information:

• Charity reporting and accounting: the essentials November 2016 (updated 14 June 2023)

• Charity Commission guidance for CIMA members

  (November 2019 update)

As a MiP, you can become a member of another body, but all have exacting requirements of additional examinations and supervised training in an audit office for a number of years before audit recognition can be given.

External audit is not covered by CIMA's qualification. Any member who wishes to move into this field can only do so by virtue of membership of another more appropriate body.

Please note that none of these bodies will simply reciprocate membership, and that qualification to perform audit usually involves several years' practical experience in an audit firm, as well as taking examinations.