Friendly and Industrial and Provident Societies Act 1968
Friendly and Industrial andProvident Societies Act 1968
1968 CHAPTER 55
An Act to make further provision with respect to the accounts of friendly societies and industrial and provident societies and the auditing of those accounts, and with respect to the rules and valuations of friendly societies.
[26th July 1968]
Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Societies: accounts and audit, etc.
1 Books of account, etc.
(1) Every society shall—
(a ) cause to be kept proper books of account with respect to its transactions and its assets and liabilities, and
(b ) establish and maintain a satisfactory system of control of its books of account, its cash holdings and all its receipts and remittances.
(2) For the purposes of paragraph (a ) of the preceding subsection proper books of account shall not be taken to be kept with respect to the matters mentioned in that paragraph if there are not kept such books as are necessary to give a true and fair view of the state of the affairs of the society and to explain its transactions.
2 Form in which books of account may be kept.
(1) Any book of account to be kept by a society may be kept either by making entries in bound books or by recording the matters in question in any other manner.
(2) Where any such book of account is not kept by making entries in a bound book but by some other means, the society shall take adequate precautions for guarding against falsification and facilitating its discovery.
3 General provisions as to accounts and balance sheets of societies.
(1) Every revenue account of a society shall give a true and fair view—
(a ) if it deals with the affairs of the society as a whole, of the income and expenditure of the society as a whole, or
(b ) if it deals with a particular business conducted by the society, of the income and expenditure of the society in respect of that business,
for the period to which the account relates.
(2) Every society shall, in respect of each year of account, cause to be prepared either—
(a ) a revenue account which deals with the affairs of the society as a whole for that year, or
(b ) two or more revenue accounts for that year which deal separately with particular businesses conducted by the society.
(3) In a case falling within paragraph (b ) of the last preceding subsection, without prejudice to the application of subsection (1) (b ) of this section to each revenue account dealing with a particular business conducted by the society, the revenue accounts in question, when considered together, shall give a true and fair view of the income and expenditure of the society as a whole for the year of account to which they relate.
(4) Every balance sheet of a society shall give a true and fair view as at the date of the balance sheet—
(a ) in the case of a society to which section 28 of the Act of 1896 (quinquennial valuations) applies, of the assets and current liabilities of the society and the resulting balances of its funds, and
(b ) in the case of any other society, of the state of the affairs of the society.
(5) A society shall not publish any revenue account or balance sheet unless—
(a ) it has been previously audited by the auditor or auditors last appointed to audit the accounts and balance sheet of the society,
(b ) it incorporates a report by the auditor or auditors stating whether in their opinion it complies with the provision of subsection (1) or subsection (4) of this section which is applicable in that case, and
(c ) it has been signed by the secretary of the society and by two members of the committee of the society acting on behalf of that committee.
(6) Without prejudice to the provisions of subsection (5) of this section a society to which section 28 of the Act of 1896 applies shall not publish any balance sheet which does not include a statement containing the same particulars as the statement required to be included in the annual return of that society by section 11(6) of this Act.
(7) If in relation to any revenue account, revenue accounts or balance sheet of a society a member of the committee of the society fails to take all reasonable steps to secure compliance—
(a ) with the provision of subsection (1) or subsection (4) of this section which is applicable in that case, or
(b ) in a case falling within subsection (2)(b ) of this section, with subsection (3) of this section,
he shall be guilty of an offence under the appropriate registration Act, unless he proves that he had reasonable grounds to believe, and did believe, that a competent and reliable person was charged with the duty of seeing that the relevant provision was complied with and was in a position to discharge that duty.
(8) In the case of a society to which this subsection applies, the preceding provisions of this section shall not have effect in relation to—
(a ) any revenue account of that society for a period ending before the last day of the year of account in respect of which the provisions of section 4(1) or section 4(5) of this Act (as the case may be) first apply to that society; and
(b ) any balance sheet of that society relating to its affairs as at a date before that day.
(9) The last preceding subsection applies in the case of any society which is registered under the Act of 1896 or under the Act of 1965 (as the case may be) at the date of the commencement of this Act, or which is first registered under either of those Acts on or after that date but before 1st January 1969.
4 Obligation to appoint auditors.
(1) Subject to the following provisions of this section, every society shall in each year of account beginning on or after 1st January 1969 appoint a qualified auditor or qualified auditors to audit its accounts and balance sheet for that year.
(2) Subsection (1) of this section shall not apply to any society (not being a collecting society) if—
(a ) the receipts and payments of that society in respect of the preceding year of account did not in the aggregate exceed 5,000;
(b ) the number of its members at the end of that year did not exceed five hundred; and
(c ) the value of its assets at the end of that year did not in the aggregate exceed 5,000.
(3) Without prejudice to the provisions of the last preceding subsection, subsection (1) of this section shall not apply to a registered branch if—
(a ) the conditions specified in paragraphs (a ) and (b ) of the last preceding subsection are satisfied in respect of that branch, and
(b ) at the end of the preceding year of account at least seventy-five per cent of its assets had been transferred to the society of which it is a branch or to another registered branch of that society for the purpose of being invested, in accordance with section 44(2) of the Act of 1896, by that society or that other branch, and the value of its assets not so transferred did not in the aggregate exceed 5,000:
Provided that this subsection shall not have effect so as to exempt a registered branch from the requirements of subsection (1) of this section in any year of account in respect of which that subsection does not apply to the society or branch to which the assets have been transferred.
(4) A society to which by virtue of subsection (2) or (3) of this section subsection (1) of this section does not apply in respect of any year of account is in this Act referred to as an exempt society in respect of that year of account.
(5) Subject to any direction given by the registrar under the next following subsection, every society which is an exempt society in respect of the current year of account shall in that year appoint at its option either—
(a ) a qualified auditor or qualified auditors, or
(b ) two or more persons who are not qualified auditors,
to audit its accounts and balance sheet for that year.
(6) The registrar may give a direction in the case of any particular society which is an exempt society in respect of the current year of account requiring it to appoint a qualified auditor to audit its accounts and balance sheet for that year.
(7) The registrar may give a direction in the case of any particular society which was an exempt society in respect of any year of account before the year of account in which that direction is given and did not appoint a qualified auditor or qualified auditors to audit its accounts and balance sheet for that year—
(a ) requiring it to appoint a qualified auditor to audit those accounts and that balance sheet, and
(b ) in a case where that society has sent to him its annual return for that year before the date of the direction, requiring it after its accounts and balance sheet have been audited by a qualified auditor to send to him within three months from receipt of the direction a further annual return complying with the requirements of this Act and of section 27 of the Act of 1896 or, as the case may be, of section 39 of the Act of 1965 (other than that as to time...
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