Under Section 330 of the Act, all companies publishing a director’s report as part of the financial statements will now have to include a statement by the directors known as the ‘Statement on Relevant Audit Information’. The inclusion of this statement is only applicable where the financial year commences on or after 1 June 2015. Therefore, directors should take the relevant steps required to ensure they are aware of all relevant audit information from the first day of the next full financial year that commences after 1 June 2015.
The statement requires the directors to confirm the following:
Statement on Relevant Audit Information (s330)
• So far as the directors are aware, there is no relevant audit information* of which the statutory auditors are unaware;
• The directors have taken all steps** that they ought to have taken to make themselves aware of any relevant audit information and they have established that the statutory auditors are aware of that information.
*In this instance, ‘relevant audit information’ refers to any information needed by the company’s statutory auditors in connection with their audit report.
**A director is considered to have taken all the steps they ought to have taken if they have made enquiries of their fellow directors and of the auditors and have taken any other reasonable steps as required such as discussions with management, review of pertinent financial information etc.
The requirements of the statement lead to increased responsibilities and accountability for directors of a company in terms of making themselves aware of the relevant audit information and appropriate communication of same. Whilst this is something that would have, to date, formed part of their fiduciary duties as directors, their specific requirement in the Act puts them on a statutory footing.
Where a directors’ report contains the ‘Statement on Relevant Audit Information’ and it is knowingly or recklessly false, then every implicated director will be guilty of a Category 2 Offence under the Act.
Illustrated disclosure of directors’ statement on relevant audit information:
Each of the persons who are directors at the time when this Directors’ report is approved has confirmed that:
• so far as that director is aware, there is no relevant audit information of which the company’s auditors are unaware; and
• that director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company’s auditors are aware of that information.