Financial statements are one of the most important documents in running a business. They show the financial position of an entity for a given reporting period. For many business owners, working with an accounting office is key to preparing them. This raises questions about the scope of the accounting office's responsibility and the procedures for preparing and signing this document.
Today, accounting offices play an increasingly important role in keeping the accounts of Polish businesses. Their tasks go far beyond simply posting business transactions and cover comprehensive financial and accounting services, including the preparation of financial statements. Every business owner planning to use such services should understand how accounting offices work and what their obligations are in financial reporting.
What an accounting office is
An accounting office is a specialised form of business activity focused on providing professional bookkeeping services. Under the law, this activity covers a wide range of tasks related to keeping the accounts of other businesses.
An accounting office may provide services consisting of periodically determining or checking, by way of a stocktake, the actual state of assets and liabilities. This also includes keeping accounting books on the basis of accounting documents, recording events in chronological and systematic order (Article 76a section 1 in conjunction with Article 4 section 3 points 2–6 of the Accounting Act)
The core tasks of an accounting office include collecting and storing accounting documents and other records required by the Accounting Act. The scope of services may also include preparing financial statements, valuing assets and liabilities, and determining the financial result for clients.
Accounting offices may operate in various legal forms, including JDG (sole proprietorship – a non-agricultural sole business), partnerships, commercial companies or cooperatives. Many offices operate as a non-agricultural sole proprietorship
Since 2014, providing bookkeeping services has not required a certificate or any specific education. The work must be performed by people who have full legal capacity and have not been finally convicted of the offences listed in the Act, including offences against the credibility of documents, property and economic transactions, as well as fiscal offences (Article 76a section 3 of the Accounting Act). The office is, however, required to take out third-party liability insurance (Article 76h) – the minimum sum insured is the equivalent of EUR 10,000 per event. In practice, the knowledge and experience of the accountants determine the quality of the service. An office’s duties do not end when the contract does, as the consequences of an accounting office withholding documents show.
A professional accounting office offers comprehensive services, which may include:
- Full accounting in accordance with the Accounting Act
- Preparing and filing tax returns
- HR and payroll services and settlements with ZUS (Social Insurance Institution)
- Day-to-day explanations on tax settlements (professional tax advice is reserved, among others, for tax advisers, advocates, legal advisers and statutory auditors)
- Financial analysis and controlling
- Support during tax audits and during the audit of financial statements by a statutory auditor
Entities required to prepare financial statements
Financial statements are a document containing comprehensive financial data for a specific reporting period, which most often coincides with the calendar year. The obligation to prepare them arises directly from the Accounting Act.
Under Article 45 of the Accounting Act, financial statements are prepared as at the day the accounting books are closed and as at another balance sheet date. When preparing them, the rules for valuing assets and liabilities and determining the financial result set out in Chapter 4 of the Act apply
The list of entities required to prepare financial statements is strictly defined by law. The obligation applies to various organisational forms that run a business.
Entities required to do so regardless of their revenue include, among others (Article 2 section 1 point 1 of the Accounting Act):
- Sp. z o.o. (limited liability companies) – one of the most popular forms of doing business
- Joint-stock companies and simple joint-stock companies, representing the capital company forms
- Limited joint-stock partnerships, which combine features of partnerships and capital companies
- European companies operating under European law
Limited partnerships, as commercial companies, always keep accounting books and prepare financial statements. General partnerships of natural persons, professional partnerships, civil-law partnerships of natural persons and natural persons running a business have this obligation if their net revenue from the sale of goods and products for the previous financial year was at least the equivalent of EUR 2,500,000 (Article 2 section 1 point 2 of the Accounting Act), or if they have voluntarily chosen to keep accounting books (Article 2 section 2)
A natural person running an accounting office has no special reporting obligations because of it. They are subject to the same rules as other business owners: they prepare financial statements only if they keep accounting books themselves. A general partnership of natural persons or a professional partnership below the threshold that does not keep accounting books files a statement with the KRS (National Court Register) within 6 months of the end of the financial year, declaring that it has no obligation to prepare financial statements (Article 70a). The full list of entities with this obligation is given in who prepares financial statements and the deadlines.
| Type of entity | Legal form | Reporting obligation | Filing deadline |
|---|---|---|---|
| Sp. z o.o. | Capital company | Yes | With the KRS within 15 days of approval (approval within 6 months of the balance sheet date) |
| Joint-stock company | Capital company | Yes | With the KRS within 15 days of approval (approval within 6 months of the balance sheet date) |
| General partnership of natural persons | Partnership | Yes, if it keeps accounting books (EUR 2,500,000 threshold or choice) | With the KRS within 15 days of approval |
| Natural person (e.g. owner of an accounting office) | Sole proprietorship | Only when keeping accounting books (EUR 2,500,000 threshold or choice) | To the Head of KAS (National Revenue Administration) before the deadline for filing the PIT return |
Concluding a contract with an accounting office
Professional cooperation with an accounting office requires a proper contract that precisely defines the scope of services and the mutual obligations of the parties. Although written form is not required on pain of invalidity, it is the best business practice. However, the office's acceptance of responsibility for the duties entrusted to it must be confirmed in writing (Article 4 section 5 of the Accounting Act).
A contract with an accounting office should be concluded in writing, as this provides the greatest legal certainty. The document should state precisely which tasks the accounting office is obliged to perform and what can be required of it
The range of services provided by an accounting office can be very broad and tailored to the client's individual needs. The basic areas of cooperation include keeping accounting books in line with the Accounting Act and keeping the KPiR (tax revenue and expense ledger) for entities using simplified records.
Comprehensive accounting services may also include:
- Settling all types of taxes, including VAT, CIT (corporate income tax) and PIT (personal income tax)
- Full HR and payroll services for employees
- Preparing and submitting reports to ZUS
- Keeping records of fixed assets and intangible assets
- Analysing the company's financial position
- Preparing complete financial statements
The scope of the accounting office's duties always depends on the provisions of the contract and the rules of cooperation set out in it. However, the head of the entity is always responsible for accounting, including supervision – even when the duties have been entrusted to an office. The office may accept responsibility for the duties entrusted to it (except for a stocktake in the form of a physical count), which is confirmed in writing (Article 4 section 5 of the Accounting Act)
A well-drafted contract should contain detailed provisions on:
- The exact scope of accounting services
- Deadlines for individual tasks
- The amount of the fee and how it is paid
- The parties' liability for any errors or delays
- Procedures for communication and handing over documents
- Terms of termination
To make sure the tasks are carried out as professionally as possible, it makes sense to conclude comprehensive contracts with accounting offices that clearly define the scope of the financial and accounting tasks entrusted and the office's responsibility. Entrusting tasks does not relieve the head of the entity of responsibility.
Structure and content of financial statements
Financial statements are a comprehensive document presenting the entity's financial position at the end of the reporting period. Under Polish law, this document must be prepared in Polish and in the Polish currency (Article 45 section 5 of the Accounting Act). Financial statements are prepared in electronic form and signed with a qualified electronic signature, a trusted signature (podpis zaufany) or a personal signature (podpis osobisty) (Article 45 section 1f), and entities entered in the KRS prepare them in the logical structure published in the Public Information Bulletin (BIP) of the Ministry of Finance (Article 45 section 1g).
Financial statements consist of three basic elements: a balance sheet showing assets and liabilities as at the last day of the current and previous financial year, a profit and loss account, and notes containing a description of the accounting policies adopted (Article 45 section 2). Entities other than micro and small entities also prepare a statement of changes in equity and a cash flow statement (Article 45 section 3)
The balance sheet is the most important part of the financial statements, presenting the company's assets and their sources of financing. It shows assets and liabilities as at the last day of the financial year and, for comparison, as at the end of the previous financial year.
The profit and loss account presents the result of operating activities and the result of financial operations of the entity in a given financial year (Article 42 section 1; extraordinary gains and losses are shown only by banks, insurance and reinsurance companies and credit unions (SKOK)). It makes it possible to assess the profitability of the business and how efficiently the company uses its resources. The order of work on the whole document, including the profit and loss account, is set out in preparing financial statements step by step.
The notes contain a detailed description of the accounting policies adopted, valuation methods and changes compared with the previous year. This element is key to interpreting the figures in the balance sheet and the profit and loss account correctly
Together with the financial statements, the following documents are filed with the KRS, which complete the picture of the entity's financial position (Article 69 section 1):
- A copy of the resolution approving the financial statements
- The management report, if required by law
- A copy of the resolution on the distribution of profit or coverage of loss
- The statutory auditor's audit report, where the financial statements were subject to a mandatory audit
Pay particular attention to the quality and completeness of the notes, which often determine how useful the whole financial statements are to their readers.
Procedure for signing financial statements
Signing financial statements when working with an accounting office is particularly important in terms of legal responsibility and formal requirements. The Accounting Act sets out precisely who signs this document.
Under Article 52 section 2 of the Accounting Act, financial statements are signed – with the date of signature – by the person entrusted with keeping the accounting books and by the head of the entity
In entities with their own accounting department, the person entrusted with keeping the accounting books is usually the chief accountant employed by the entity. However, a business may entrust the tasks of keeping the accounts and preparing financial statements to an external accounting office.
If the entity is managed by a multi-member body, the financial statements are signed by all members of that body or by at least one of them – after the others have made statements that the financial statements meet the requirements of the Act, or have refused to make such statements (Article 52 sections 2 and 2b). This means that in a sp. z o.o. with a management board of several members, either all board members sign, or one of them signs together with the statements of the others.
Where the accounts are entrusted to an accounting office, the financial statements are signed by the natural person to whom the office has entrusted keeping the books of that entity (e.g. the owner of a one-person office or a designated employee), together with the head of the entity. Only a natural person can use a qualified, trusted or personal signature. For example, if a sp. z o.o. with a one-member management board (the president) works with a one-person accounting office, the financial statements are signed by the president and the owner of the office
The signing procedure has significant legal meaning:
- The signature confirms that the financial statements meet the requirements of the Act (Article 52 section 2a)
- It means acceptance of the accounting policies and valuation methods applied
- It confirms that the financial data presented are correct
- It is the basis for the signatories' legal liability
A commercial company worked with an accounting office for 5 years and entrusted it with all of its bookkeeping. The owner of the accounting office, who was also the chief accountant, prepared all the financial statements. The company had a one-member management board, so each set of financial statements was signed by the owner of the office and the president of the company's management board, which met the requirements of Article 52 section 2 of the Accounting Act.
Note that refusing to sign the financial statements requires a written justification, which is attached to the financial statements. This is because a signature confirms that the financial statements meet the requirements of the Act (Article 52 section 2a).
Legal liability and consequences
Financial statements, as a public document, carry specific legal consequences for the people responsible for preparing and signing them. Irregularities in this area can lead to serious financial and legal sanctions.
Failing to file financial statements with the competent court register is an offence punishable by a fine or restriction of liberty (Article 79 point 4 of the Accounting Act); the obligation to file rests with the head of the entity (Article 69 section 1). Failing to prepare financial statements, preparing them in breach of the Act or including unreliable data in them is punishable by a fine, imprisonment of up to 2 years or both (Article 77 point 2) – anyone who allows this to happen may be liable, including the person keeping the accounting books
When working with an accounting office, responsibility for the financial statements rests on several grounds. The head of the entity is always responsible for performing the accounting obligations (Article 4 section 5), while the accounting office is liable to the client under the contract, including for the scope of responsibility accepted in writing.
The main areas of responsibility include:
- Compliance of the financial statements with the Accounting Act
- Correctness of the accounting policies and valuation methods applied
- Completeness and reliability of the financial data presented
- Timely filing of the financial statements with the competent authorities
- Meeting the formal requirements for signing the document
Anyone who disagrees with the financial statements must justify their refusal to sign them. This justification must be made in writing and attached to the financial statements
When accepting an engagement to prepare financial statements, an accounting office undertakes to:
- Apply the appropriate accounting policies
- Value assets and liabilities correctly
- Prepare complete and reliable financial statements
- Meet the statutory deadlines
- Ensure compliance with formal requirements
If errors or irregularities are found in the financial statements, both the head of the entity and the accounting office may be held liable. That is why third-party liability insurance of the office (mandatory – Article 76h of the Accounting Act) and a precise definition of the scope of liability in the accounting services contract are so important.
Filing financial statements
Once the financial statements have been prepared and signed, the entity must file them with the competent authorities as required by law. The filing procedure depends on the legal form of the entity and the nature of its business.
Financial statements prepared by an accounting office go to the National Court Register (entities entered in the register of entrepreneurs – Article 69 of the Accounting Act) or to the Head of KAS (other taxpayers keeping accounting books, e.g. natural persons and civil-law partnerships – Article 45 section 5 of the PIT Act, Article 27 section 2 of the CIT Act)
Commercial companies file their financial statements with the register of entrepreneurs kept by the registry courts. The financial statements must be prepared within 3 months of the balance sheet date (Article 52 section 1), approved no later than 6 months after the balance sheet date (Article 53 section 1) and filed with the KRS within 15 days of approval (Article 69 section 1). Where the financial year is the calendar year, this means preparation by 31 March, approval by 30 June and filing by 15 July at the latest. If the financial statements have not been approved on time, they are filed within 15 days after that deadline (Article 69 section 2).
The filing process includes the following stages:
- Preparation of the financial statements by the accounting office (within 3 months of the balance sheet date)
- Review and acceptance by the entity's management
- Signing by the authorised persons in accordance with the law
- Approval of the financial statements by the competent body of the entity (within 6 months of the balance sheet date)
- Filing with the competent register within the required deadline (15 days of approval)
Working with an accounting office can make filing financial statements easier if the contract also covers preparing the documents for filing. However, filing the financial statements with the register remains the legal obligation of the head of the entity (Article 69 section 1)
An accounting office can also support the client in:
- Preparing the documents accompanying the financial statements
- Coordinating the approval process by the entity's bodies
- Filing the financial statements with the competent register
- Monitoring deadlines and formal requirements
- Communicating with the registry authorities where necessary
A well-run accounting office should have systems that remind it of filing deadlines and procedures that ensure all of its clients' reporting obligations are met on time.
