Who is responsible for the accounts: the directors or the auditor?

Directors' responsibilities

• Keep accounting and other records that explain transactions and allow the accounts to be conveniently audited, and enter transactions within 60 days (section 245).
• Maintain a system of internal control (section 246).
• Prepare financial statements within the deadlines (section 248).
• Ensure they comply with approved accounting standards (section 244).
• Have the Board approve them with a statutory declaration (section 251), and prepare the directors' report (section 252).
• Circulate and lodge them on time (sections 257-259).
• Appoint the auditor (or properly elect exemption) (section 267).

The auditor's responsibilities

• Report to members on the financial statements and records (section 266(1)).
• State whether the statements give a true and fair view and comply with the Act and standards.
• Report on information obtained and records kept.
• Report certain breaches to the Registrar.

What follows

• If the accounts are wrong, directors cannot say the auditor approved them. The auditor's report is an opinion, not a certification.
• If directors fail their duties, the offences in sections 245, 248, 258 and 259 attach to them and officers.
• For audit-exempt companies, the director who signs the exemption certificate states the company is entitled to the exemption (Practice Directive 10/2024, para 19).

Practical advice. Keep outsourced bookkeeping under review. You can delegate tasks but not accountability.