The Companies Act prescribes that every company must keep adequate accounting records that are sufficient to:
- Show and explain the company’s transactions and to disclose with reasonable accuracy, at any time, the financial position of the company at that time and to enable the directors to ensure that any accounts required to be prepared comply with the requirements of the Act.
- The records must contain entries from day to day of all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place.
- A record of the assets and liabilities of the company.
- Where the company’s business involves dealing in goods, the accounting records must enable the company to establish the statement of stock at the end of each financial year end including the stock taking records. This applies except in the case of goods sold by way of ordinary retail trade, statements of all goods sold and purchased, showing the goods and the buyers and sellers in sufficient detail to enable all these to be identified.
Retention of company records
The following table indicates the length of time company records should be maintained;
|Number of years from the date on which they are made