Only one director is required by law to sign the balance sheet on behalf of the board but, in the case of companies with shares traded on a market, it is quite common to see the balance sheet signed by two directors, for example, the Chairman and the Finance Director. To some extent this is probably a hangover from the days, prior to the Companies Act 1989, when the balance sheet had to be signed by two directors.
Financial Statements Approval Process
Financial statements of unincorporated businesses should also be approved by the proprietor or board of management (or its equivalent) before any auditor’s or accountants’ report is signed. This will normally be evidenced by a declaration along the lines of ‘We approve these financial statements’ or ‘Approved by the Board of Management’ together with a signature or signatures. There may be circumstances where a fuller declaration, such as ‘We approve these financial statements and confirm that we have made available all relevant records and information for their preparation’, would be appropriate.
In the case of partnerships, the declaration should be signed either by all the partners or by the partner(s) duly authorised to sign on behalf of all the partners.
The date on which the financial statements are approved by the board of directors (or authorised for issue by the board of management, or equivalent, of an organisation which does not have directors) should be disclosed in the financial statements. [IAS 10] This date is important in establishing the date to which the directors are responsible for adjusting for or disclosing material events after the balance sheet date.
An Example of Signing Off a Financial Statement
Approval and signing of financial statements.
The financial statements of Group Plc (registered number xxxxxxxx) were approved by the board of directors and authorised for issue on 24 July 20X1. They were signed on its behalf by:
[Name of signatory to be stated]
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