F.1 Statutory requirements
S114 of the Companies Ordinance requires proper books of account to be kept with respect to:
S115 requires that a balance sheet and profit and loss account be set before the company in general meeting not later than eighteen months after incorporation and subsequently once at least in every calendar year. A report by the directors as to the state of the companyes affairs should be attached to the balance sheet. This report should also mention what dividend, if any, is recommended for payment and the amount which has been transferred to reserves.
Prescription as to the content of the accounts is minimal. However, the following is required:
At present there is no requirement to consolidate accounts of
groups of companies in Gibraltar. However, s 118 of the Companies
Ordinance requires a statement to appear in the financial
statements of the holding company indicating how the profits and
losses of its subsidiaries have been dealt with in, or for the
purposes of, the accounts of the holding company.
Every auditor of a company has the right of access at all times to the books, accounts and vouchers of the company, and is entitled to require from the directors and officers of the company such information and explanations as may be deemed necessary for the performance of their duties.
F.2 Accounting Principles
As a large number of accountants and auditors in Gibraltar are members of two of the United Kingdomes major accounting bodies, guidance on accounting principles is obtained from pronouncements of the United Kingdom Accounting Standards Board. The Gibraltar Society of Chartered and Certified Accountants has adopted most Accounting and all Auditing Standards issued to date in the UK, tailoring them where necessary to Gibraltar's circumstances.
Regulations made under the Financial Services Ordinance have given statutory force to Accounting Standards adopted by the Consultative Committee of Accountancy Bodies in the United Kingdom in so far as they must be applied to the financial statements of companies licensed under this Ordinance.
F.3 Financial Services Ordinance
Most classes of financial services businesses in Gibraltar require licensing by the Financial Services Commission in accordance with the regulatory framework provided by the Financial Services Ordinance and subsidiary regulations.
The Commission comprises eight members, including the Commissioner who is also the Chairman, who are appointed by the Governor with the approval of the Foreign and Commonwealth Secretary in the U.K.
The Commissioner is also responsible for the supervision of banks and insurance companies under the requirements of the corresponding ordinances. Commission personnel now include individual supervisors for banking, insurance and controlled activities.
On 1st January 1996 the Criminal Justice Ordinance 1995 came into force. This extended money laundering offenses from drug trafficking to all crimes. Persons carrying on relevant financial business are required (as they have been since 1994) to put into place measures to ensure the prevention, detection and reporting of suspicious transactions.
The Commission has taken the view that this requirement should apply to all its licensees and not just those carrying out relevant financial business. Gibraltar is, therefore, fully in compliance with the FATF 40 Recommendations, the Basle Principles, the Vienna Convention and the EU directive on Money Laundering.