In just a few days, a major deadline for many entrepreneurs is approaching: the deadline for approving financial statements. According to the law, assuming the financial year aligns with the calendar year, a company’s financial statements must be approved by June 30. Then – within 15 days (i.e. by mid-July) – they must be submitted to the National Court Register.
However, for many entrepreneurs, an additional obligation applies – the financial statements must be audited by a statutory auditor.
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In June, many business owners anxiously watch the calendar, aware that the chances of completing the audit on time are slim. There may be several reasons: late preparation of the financial statements, delays in providing documentation by the company, staffing changes, or communication problems on the company’s side.
What should an entrepreneur do in such a situation? Can they submit an “incomplete” report, or must they wait until the audit is completed?
Financial Statements Ready, Audit Not – What Next?
The financial statements are already prepared and ready for approval, but the auditor’s opinion is still missing – and time is running out, as June 30 (the deadline for shareholders to approve the statements) is fast approaching. Fortunately, the legislator has provided an appropriate solution that allows companies to fulfill their obligations without exposing themselves to potential liability.
According to Article 69(2) of the Accounting Act, if the financial statements are not approved on time (i.e. by June 30), they must still be submitted to the National Court Register (KRS) no later than July 15. Then, after formal approval, a complete set of documents (including the audit opinion issued by the statutory auditor and shareholders’ resolutions) must be resubmitted within 15 days.
The above provisions also apply to a parent entity preparing consolidated financial statements.
No Audit = No Dividend
However, this does not mean that the absence of an auditor’s opinion has no consequences.
It must be emphasized that in such a case, until the audit of the financial statements is completed, the shareholders’ meeting cannot adopt a resolution on the distribution of profit or the coverage of a recorded loss. This is because the auditor’s opinion serves to verify the reliability and accuracy of the data in the financial statements and thus provides the basis for binding financial decisions.
Until the statutory auditor issues the audit report, it is not possible to approve the financial statements. Consequently, no decisions may be made concerning the financial result that has not yet been confirmed.
Consequences of Late Filing of Financial Statements
It is also important to remember the potential liability for failing to submit financial statements to the register on time.
According to Article 79 point 4 of the Accounting Act, anyone who fails to submit the annual financial statements to the court register within the prescribed time, despite being obligated to do so, is subject to a fine or a penalty of restriction of liberty. The person liable is the head of the entity (i.e. members of the management board in a limited liability company).
Therefore, delaying the submission of financial statements may have serious consequences. Obligations in this regard should be fulfilled without delay.
As a law firm supporting entrepreneurs in registration and reporting duties, we are happy to assist you with all formal requirements.
