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Kim Smith.
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Mcginz
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Please can you explain what you meant when you said “loans to directors outside of the rules of companies law”
Kim Smith
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Welcome to my forum! It’s my predecessor’s lecture so I don’t know exactly what it is he says. I would take it to be a reference to the fact that regardless of whether such loans are permitted in law, there may be requirement for their disclosure in the notes. The monetary amounts of these loans may be immaterial – but the requirement for their disclosure makes them material by nature. The auditor would ask management to represent that all loans to directors (and indeed any transactions with directors) have been:
– appropriately accounted for (i.e. disclosed in the notes to the financial statements); and
– disclosed to the auditor (i.e. an aspect of completeness of information provided).
Mcginz
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