CHAPTER XVI
BALANCE SHEET AND AUDIT

PRIOR to the passing of the Companies Act, 1928, the Statutes
imposed obligations as to audit, but contained few provisions
as to the contents of a balance sheet, and the only reference to
the forms of the accounts was to be found in Article 103, Table
A, the adoption of which was not obligatory. The Companies
Act, 1928, contained specific provisions dealing with both
accounts and balance sheet, and these provisions have been
repeated in the Act of 1929. The provisions as to accounts are
contained in s. 122, to which reference has been made on p. 166.
The provisions as to profit and loss account and balance sheet
are mainly contained in ss. 123 to 130; but reference must
also be made to ss. 44, 45, 46, 47, 54 and 75.

The directors must once a year lay before the company
in general meeting a profit and loss account and a balance
sheet made up to the same date as the profit and loss account.
The general meeting to consider the first profit and loss account
and balance sheet must be held within eighteen months of
the incorporation of the company. Each account must
be made up to a date not more than nine months earlier than
the date fixed for the meeting at which it is to be considered
or in the case of a company having interests abroad not
more than twelve months earlier. The Board of Trade
has, however, power to extend any of the above-mentioned
periods. In the case of a company not trading for profit
an income and expenditure account will take the place of
the profit and loss account (s. 123). The obligations im-
posed by this section apply to all companies, whether public
or private, and whether or not they have a share capital.

Every balance sheet must:

(i) Contain a summary of the authorised share capital and
of the issued share capital of the company, its liabilities
and assets together with such particulars as are neces-
sary to disclose the general nature of such liabilities
and assets and to distinguish between the amounts
respectively of the fixed assets and the floating assets.

Profit and
Loss Account
and Balance
Sheet.

Contents of
Balance
Sheet.