In July 2025 the UK’s Financial Conduct Authority (FCA) published revised guidance for firms on the treatment of politically exposed persons for anti-money laundering purposes. Guidance is provided on how to apply a proportionate and risk-based approach to UK Politically Exposed Persons (PEPs), their relatives and close associates for anti-money laundering purposes. The guidance includes: - clarifications that firms should not treat non-executive board members (NEBM) of civil service departments in the UK as PEPs; - changes to reflect amendments made to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and - updates to the sign-offs for PEP business relationships.   This information is provided as resources and information only and nothing in these pages purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages.    

The Corporate Enforcement Authority (CEA) has today published its second Annual Report. The CEA writes that the Report details the CEA’s activities during 2024 in furthering its strategic objectives as set out in its Statement of Strategy 2022-2025. The Report features 22 case studies that highlight the wide-ranging impact of the CEA. Those case studies evidence a careful and tiered approach towards the utilisation of the CEA’s suite of enforcement powers. Please click the link to read the CEA press release with a summary of the highlights of the report and click to read the CEA 2nd Annual Report. This information is provided as resources and information only and nothing in these pages purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages.

From the Professional Accountancy team…... Background In the  case of Downtul Limited (in liquidation ) Patrick O'Connell, Ciaran Butler and Colum Butler the liquidator of Downtul Limited (“Downtul”) sought to have two directors (the Respondents) restricted for a period of 5 years from acting as director or secretary of a company. Downtul entered a lease (“Lease”) with Stephen Court Limited (landlord) in respect of a property from which a Starbucks outlet was operated. A separate related company (Atercin Liffey Unlimited Company, “Atercin”) operated the Starbucks. Downtul did not occupy or use the leased property and had no income, or means to generate income, to discharge the liabilities arising under the Lease, including rent. There was also no evidence of any enforceable mechanism for Downtul to recover monies from Atercin to meet its liabilities. Restriction of director -acting honestly & responsibly The case established that Downtul bore the liability and burden of the Lease. The separate related company Atercin occupied and traded from the property and earned revenue from that trade. At all times since the Lease was entered, Atercin and not Downtul had occupied the Property and operated the coffee shop throughout the term of the Lease.  There was no evidence of any agreement or consideration being given to the rights of Downtul. In allowing Downtul to enter and maintain these arrangements, and in failing to ensure an enforceable mechanism by which Downtul could obtain the funds necessary to discharge its liabilities as they fell due or otherwise protect its position, the Respondents failed to demonstrate responsible conduct with regard to the interests of Downtul as a separate legal entity within the Group. Mainly for the above reasons the judge was not satisfied the respondents has acted responsibly in conducting the affairs of Downtul. It was noted that a finding of illegality or unlawfulness is not required to restrict a director under S819. the fact that a transaction is not unlawful does not mean it is not relevant to assessing a director’s honesty or responsibility. The judge also said that the failure to keep proper accounting records, the omission of material disclosures from the financial statements and the failure to minute a single board meeting since 2017 are also – independently of her primary findings of irresponsibility – separate grounds on which she was not satisfied that the Respondents acted responsibly. As she was not satisfied that the Respondents acted responsibly with regard to the conduct of the affairs of Downtul the judge said she was mandated by section 819(2) to make the declaration of restriction sought by the Liquidator.   Accounting records and materiality/disclosure/corporate governance The judgement stated that there were no accounting records, disclosures in financial statements, or board minutes which even refer to the apparent arrangements between Downtul and Atercin. The financial statements make no reference to the Lease or to the receipt of monies from Atercin to pay the rent and other charges associated with the Starbucks property. This the court said underlines the lack of transparency in relation to the affairs of Downtul. Company accounts and records should contain a true and fair view of the company’s financial position. The case also considered the issue of disclosure of material transactions under FRS 102(1A) to ensure a “true and fair view” is given of the company’s financial position. The judge said that a responsible view of Downtul’s financial position would lead to the conclusion that the Lease and issues that arose with the landlord (rent suspension, legal proceedings) are matters that would be material for a user of the financial statements. The evidence and perspective of the Liquidator that these items collectively are material and significant for Downtul was accepted by the court. The judge found in the particular circumstances of Downtul, and the specific evidence adduced, the books that were kept were not sufficient to demonstrate a responsible approach by the Respondents to the maintenance of accounting records such as to enable compliance with section 282 of the Companies Act 2014. the fact that it is a small company or a company with limited activity does not provide an excuse or justification for not maintaining even a minimum record of Downtul’s transactions (quite apart from the more fundamental issues with Downtul’s interaction with Atercin). Finally, on the corporate governance side the judge noted that the Respondents chose to become directors of more than 170 and more than 200 companies respectively. Being a director of so many companies brings with it onerous and important responsibilities. She was not suggesting this is a light task when the Respondents are responsible for some 150- 200 companies, but it was the Respondents who made the decision to incorporate and direct the affairs of such a significant number of companies. The fact they have so burdened themselves cannot absolve them of the obligation to separately discharge the duties incumbent on them in each of those roles. The only question is whether they acted responsibly with regard to the affairs of Downtul. In the absence of any record of a meeting or decision with regard to Downtul from 2017 onwards, she simply could not be, and was not, satisfied in that respect. Conclusion The judgment contains an extensive examination of the grounds for restricting a director under section 819 of Companies Act 2014. There are other useful aspects to this judgment also, including for example an account of the relevant duties of expert witnesses. Readers should note that the judge found that the respondents discharged the burden of showing they acted honestly. However, because she found they had not acted responsibly this was enough to trigger the operation of the restriction provisions in section 819. It should also be noted that the directors have been restricted for 5 years, not disqualified. Restricted means that the person cannot act as a company director (or secretary) for 5 years unless the company of which they wish to be director has an allotted share capital of €100,000 (in the case of companies other than PLCs) with each allotted share to be paid for in cash. Readers can find out more about disqualification of directors in the Corporate Enforcement Authority’s very useful note on the subject CEA Information Note 2024/1 -Circumstances leading to disqualification under the Companies Act 2014 and the associated consequences. This information is provided as resources and information only and nothing in these pages purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages.                    

One of the measures set out in the UK Economic Crime and Corporate Transparency Act is one to improve transparency by making more company financial information available to the public.   Companies House has announced that over the coming days it will start to contact by email all the UK companies on their register to let them know that from 1 April 2027, all accounts filings must be made using commercial software. From then web and paper routes will be closed for accounts filings but will remain open for other statutory filings.   UK Accounts filing options will be also streamlined from April 2027 for small and micro-entity companies. From then micro-entities will be required to file a copy of their balance sheet and profit and loss account. Small companies will be required to file a copy of balance sheet, directors’ report, auditor’s report (unless exempt) and profit and loss account.  Companies will no longer be able to prepare and file ‘abridged’ accounts. Related changes include updates to audit exemptions and accounting reference periods. For more information on these planned changes readers can check out Changes to accounts article on Companies‘ House website. This information is provided as resources and information only and nothing in these pages purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages.

The Pensions Research Accountants Group (PRAG) has published an invitation to comment on its proposed amendments to the Statement of Recommended Practice, Financial Reports of Pension Schemes 2025 (Pension SORP). 2026 has been a busy year for the various bodies responsible for developing and maintaining SORPS, as they seek to align their SORPs to FRS 102, and the changes effective on 1 January 2026. PRAG is the Financial Reporting Council’s (FRC) designated SORP-making body for pension schemes. The Pensions SORP was last updated in 2018 and since then, the FRC has made amendments to its FRS 102 Standard. There have also been several industry developments which impact on pension scheme financial reporting as well as changes to pensions legislation and regulations. Some documents of interest issued as part of the invitation to comment include; PRAG consultation page  Copy of draft SORP Webinar on 18 July to discuss the draft SORP PRAG Press Release The Invitation to comment remains open until 17 September 2025.  

The International Accounting Standards Board (IASB) has issued a revised Practice Statement on management commentary. IFRS Practice Statement 1 - Management Commentary supersedes the previous version of the same document which was issued in December 2010 and is effective for application for periods commencing on or after 23 June 2025, with early application permitted. The Statement is not an IFRS Accounting Standard or an IFRS Sustainability Disclosure Standard. The Practice Statement sets out requirements for management commentary and how those requirements can be met. Management commentary complements and accompanies financial statements with explanations from management about a company's performance, strategy and risk. On releasing the revised Practice Statement, the IASB noted that they intend that it will "serve as a global benchmark for regulators to use in updating or developing their national requirements and guidance". In recognition of the strong connectivity between management commentary and the International Sustainability Standards Board (ISSB) Standards, the IASB noted that they worked closely with the ISSB in the development of the document to help align the requirements of the two boards and to facilitate connected information across a company's financial reports.