Change is afoot for 'industrial and provident societies' as new legislation takes effect. If you are an auditor or reporting accountant with clients in this sector take note - your engagement letters, reports and accounts will need to change...
The Co-operative and Community Benefit Societies Act 2014 comes into force today (1 August 2014). The Act consolidates a number of Acts and Statutory Instruments relating to co-operative societies, community benefit societies and other societies registered under the Industrial and Provident Societies Act 1965. It therefore has important implications for references to the Industrial and Provident Societies Acts and the Friendly and Industrial and Provident Societies Act 1968 in documents for those who have clients in this sector. These references need to change for documents issued on or after 1 August 2014.
Key changes'Industrial and provident societies' become known as 'registered societies' under the new legislation. Any references to the 'Industrial and Provident Societies Act 1965' will change to the 'Co-operative and Community Benefit Societies Act 2014', as will any references to the Friendly and Industrial and Provident Societies Act 1968. For auditors and reporting accountants there will be new section numbers to refer to under the new legislation in engagement letters, reports and accounts.
As it is consolidating legislation however, the new Act does not bring about substantive change. There have been no changes, for example, to the existing audit exemption limits in place. The new Act aims to reproduce the effect of the existing legislation but to bring the law together in a more logical, accessible, clear and modern form. The language used has therefore been updated and simplified where possible.
Effective dateThe new Act is effective for documents issued on or after 1 August 2014. Changes introduced are not linked to an accounting period date. The legislation affecting accounts, audit and annual returns can be found in Part 7 of the new Act.
A brief historyChanges to legislation affecting industrial and provident societies (I & P societies) have been expected for some time. You may be familiar with the Co-Operative and Community Benefit Societies and Credit Unions Act 2010 (CCBSCU 2010), which was passed in March 2010.
The Act made provision for societies to be registered as co-operative or community benefit societies and to re-name the Industrial and Provident Societies Acts. The sector had been waiting for the final provisions of this Act to be brought into law, which would re-name the Industrial and Provident Societies Acts.
Key provisions of this Act affecting I & P societies have now been consolidated into the Co-operative and Community Benefit Societies Act 2014 (CCBSA 14), along with the 1965, 1967, 1975, 1978 and 2002 Industrial and Provident Societies Acts, the Friendly and Industrial and Provident Societies Act 1968 and the Co-operatives and Community Benefit Societies Act 2003, all of which have been repealed and replaced by the new Act. Note that the Credit Unions Act 1979 has not been included in this consolidation.
As can be seen, rather than simply re-name the Industrial and Provident Societies Acts, a wider legislative consolidation has been undertaken.
JurisdictionThe new legislation affects the law in England and Wales and in Scotland. The consolidation does not include the corresponding legislation in Northern Ireland, which is separate from that in Great Britain.
If you are an auditor that has clients that are clubs, registered social housing providers or other societies now registered under the CCBSA 14, Mercia has Specialist Assignment Manuals that are currently being updated for the new legislation. These manuals will help you audit and prepare reporting accountant's reports for clients in this sector.
Mercia Group LtdThis blog provides only an overview of the legislation and guidance issued at the date of post. No action should be taken without consulting the relevant legislation and guidance or where necessary, seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this blog can be accepted by the authors or the company.