You work for ABC financial management. What are the consequences for clients of not meeting reporting...

You work for ABC financial management. What are the consequences for clients of not meeting reporting deadlines?

Expert Solution

Deadlines for completing accounts and tax returns for example are set by the government - failing to meet these will have you in breach of the law and can result in financial penalties.

Submitting information on a timely basis is also important as accountants have several stakeholders (e.g. shareholders, employees, government, suppliers, customers, investors, banks, and loan providers) who need up-to-date information to be able to make informed decisions. For example, banks will use a business’ latest accounts to determine whether to approve a loan, whilst suppliers may want to see this information before agreeing on credit terms.

Businesses may likewise have contractual obligations which require deadlines to be met, such as for banking and landlord reporting. Failing to do this would be a breach of contract, and in extreme cases can result in the bank recalling their loan or a landlord ending its lease.

ekkarill92 answered 1 year ago

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