Management board liability for accounting in Poland

Management board liability for accounting in Poland does not end when the company outsources its bookkeeping to an external accounting firm. In a Polish limited liability company (sp. z o.o.) or joint-stock company (S.A.), the management board acts as the head of the entity within the meaning of the Polish Accounting Act and remains responsible for the performance of accounting obligations, including oversight of duties entrusted to a service provider. The scope of responsibility accepted by the accounting firm should be documented in writing.

As the head of the entity, the management board cannot transfer responsibility for conducting a physical inventory count to another person or service provider. Its duties also include establishing and updating the company’s accounting policy and ensuring that the annual financial statements are prepared.

For a management board using external accounting services in Poland, the key issue is therefore not only to define the scope of services correctly, but also to ensure the effective flow of documents, information and decisions required for proper accounting.

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Who is the head of the entity under the Polish Accounting Act?

The term head of the entity does not refer to a director or manager who is operationally responsible for the company’s finances. It is a statutory concept defined under Polish accounting law.

In a Polish limited liability company or joint-stock company, the management board generally acts as the head of the entity. Where the management body consists of more than one person, the term covers the members of that body, excluding appointed attorneys-in-fact.

This distinction is fundamental when accounting is outsourced. The fact that day-to-day bookkeeping, settlements and financial reporting are handled by an external service provider does not make the accounting firm the head of the entity.

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Does outsourcing accounting in Poland release the management board from liability?

No. The management board, acting as the head of the entity, remains responsible for the performance of accounting obligations even where specific tasks have been entrusted to an external accounting firm.

Article 4(5) of the Polish Accounting Act expressly provides that the head of the entity is responsible for performing the obligations laid down in the Act, including responsibility for oversight, even after specific duties have been entrusted to another person or to an entrepreneur providing bookkeeping services. The acceptance of responsibility by that person or service provider should be documented in writing.

In practice, this means that an agreement with an accounting firm should not be treated as a document transferring all responsibility for accounting outside the company.

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What should be clearly defined when accounting is outsourced in Poland?

The respective responsibilities should primarily be divided as follows:

Area	Role of the accounting firm	Role of the management board as head of the entity
Keeping accounting books	May be entrusted to the accounting firm	Remains responsible, including for oversight
Preparing financial statements	May form part of the scope of services	Ensures that the financial statements are prepared
Accounting policy	The accounting firm may prepare a draft and propose solutions	Establishes it in writing and keeps it up to date
Inventory – physical count	Technical activities may be performed with the involvement of an external provider	Responsibility for conducting the physical inventory count cannot be transferred
Providing data and documents	Processes the information received in accordance with the agreed scope of services	Should ensure an accurate and timely flow of information
Accounting oversight	Performs duties arising from the service agreement	Remains the responsibility of the head of the entity

The Polish Ministry of Finance also confirms that merely outsourcing specific activities related to an inventory does not release the management board, acting as the head of the entity, from the responsibility imposed by the Accounting Act.

When using outsourced accounting in Poland, it is therefore important to establish precisely not only which activities the service provider performs, but also who on the client side provides data, approves specific solutions and makes decisions required from the head of the entity.

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Which accounting duties can be outsourced to an accounting firm in Poland?

The Polish Accounting Act allows an entity to entrust its accounting books to an authorised entrepreneur providing such services.

The scope of cooperation may include, in particular:

• keeping accounting books on the basis of accounting documents;
• classifying business transactions for recognition in the accounting records;
• measuring assets and liabilities and determining the financial result;
• preparing financial statements;
• maintaining the required accounting documentation;
• preparing tax settlements and JPK files, if covered by the agreement;
• preparing financial information required by the management board.

The provision of bookkeeping services is a business activity governed by the Polish Accounting Act. An entrepreneur providing such services is, among other things, required to hold professional liability insurance covering damage caused in connection with keeping accounting books.

This does not, however, change the statutory responsibility of the management board as the head of the entity.

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What management board accounting responsibilities remain after outsourcing?

Management board liability for accounting should be distinguished from the performance of specific bookkeeping activities by an external accounting firm. The management board, acting as the head of the entity, remains responsible for organising and overseeing accounting to the extent required by the Polish Accounting Act.

Accounting policy

The management board, as the head of the entity, is responsible for establishing in writing and updating the documentation describing the accounting principles adopted by the company.

In practice, a draft accounting policy may be prepared by the accounting firm. This is a natural solution because the document requires specialist knowledge of matters such as valuation methods, the chart of accounts and the way in which accounting books are maintained.

The final determination of the accounting principles applied by the entity nevertheless remains the responsibility of the head of the entity.

Inventory

Particular attention should be paid to inventory procedures carried out by means of a physical count.

Article 4(5) of the Polish Accounting Act excludes the possibility of transferring responsibility for conducting a physical inventory count to another person or entrepreneur.

This does not mean that an external provider cannot participate in organising or carrying out activities related to the count. The Polish Ministry of Finance indicates, however, that outsourcing the performance of the count to an external provider does not release the head of the entity from responsibility.

Annual financial statements

The management board, acting as the head of the entity, must ensure that the annual financial statements are prepared no later than three months after the balance sheet date.

The financial statements are signed by the person entrusted with keeping the accounting books and by the head of the entity. Where the management body consists of more than one person, the procedure provided for by the Polish Accounting Act may be applied, under which the financial statements are signed by at least one member of the body and the remaining members submit the required statements or reasons for refusing to sign.

This means that preparation of the financial statements by an external accounting firm does not replace the actions required of the management board.

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Can someone from an accounting firm sign the financial statements?

Yes, provided that the person has been entrusted with keeping the accounting books under the accounting arrangements adopted by the entity and is therefore required to sign the financial statements.

Under Article 52 of the Polish Accounting Act, the financial statements are signed by the person entrusted with keeping the accounting books and by the head of the entity.

Using an external accounting firm therefore does not replace the signature of the head of the entity and does not automatically mean that any person representing the accounting firm may sign the financial statements.

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How should the management board work with an external accounting firm?

The most common organisational problem is not the posting of an accounting document itself, but the absence of information needed to assess a particular business event correctly.

An accounting firm can perform its duties properly only if it receives complete information about events relevant to the company’s accounting and tax affairs.

This includes, for example:

• new agreements and amendments;
• financing arrangements and loans;
• ownership changes and reorganisations;
• investments and acquisitions of significant assets;
• transactions with related parties;
• court proceedings and potential liabilities;
• events affecting asset valuations or provisions;
• events after the balance sheet date;
• decisions that may affect the entity’s ability to continue as a going concern.

Outsourced accounting should therefore also include an established communication process between the accounting firm and the company’s decision-makers.

From the perspective of the head of the entity, both the service agreement and internal procedures should answer three questions: what information must be provided, who is responsible for providing it and by when it must reach the accounting team.

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Who is responsible for filing financial statements with the National Court Register in Poland?

The Polish Accounting Act assigns responsibility for filing the required documents with the competent court register to the head of the entity.

As a general rule, the documents must be filed within 15 days of approval of the annual financial statements. The scope of the documents submitted depends on the entity’s circumstances and may include, among other things, the financial statements, the resolution approving them and the relevant accompanying documents.

An accounting firm may provide organisational support in preparing the documents and performing technical filing activities where this is included in the agreed scope of services.

This does not, however, change the obligations that Polish law assigns to the head of the entity.

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How can a management board reduce risk when using an external accounting firm?

For the management board, the key objective should not be to attempt to contractually “transfer liability”, but to establish a cooperation model that makes it possible to perform the oversight obligation effectively.

In practice, companies should ensure that:

1. the scope of services is unambiguous – it should be clear which activities are performed by the accounting firm and which remain with the company;
2. the delegation of duties is properly documented – Article 4(5) requires written confirmation that responsibility for the delegated duties has been accepted;
3. process owners are designated on the client side – particularly for invoices, contracts, remuneration, fixed assets and management information;
4. deadlines for providing documents and information are defined;
5. the management board receives information about matters requiring its decision;
6. the accounting policy is updated when the company’s activities and processes change;
7. annual financial reporting is planned in advance, particularly where management board members operate outside Poland.

Under this model, accounting services for companies in Poland should not be treated as replacing the management board’s obligations, but as a system for carrying them out professionally and keeping them under appropriate control.

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What should the management board not assume after outsourcing accounting?

The most significant risk is assuming that because accounting has been entrusted to a professional service provider, responsibility for accounting has also moved entirely outside the company.

The Polish Accounting Act does not provide for such an outcome. Article 4(5) preserves the responsibility of the head of the entity even where some duties have been entrusted to another party.

At the same time, Polish law provides for sanctions, among other things, for allowing accounting books not to be kept, for keeping them contrary to the Accounting Act, for failing to prepare financial statements or for including unreliable information in those statements.

The management board’s fundamental task therefore remains to organise cooperation with the accounting firm so that the allocation of responsibilities, the flow of information and the oversight mechanisms are clear and can be demonstrated.

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Summary

Management board liability for accounting in Poland does not end when an agreement with an external accounting firm is signed. An external provider may take over the performance of a broad range of accounting activities, but the head of the entity retains statutory responsibility, including responsibility for oversight.

A properly structured accounting outsourcing arrangement should therefore define not only the scope of work performed by the accounting firm, but also the client’s information obligations, the people responsible for individual processes and the way in which matters requiring management board decisions are communicated.

If you would like to clarify the allocation of responsibilities, document flows and cooperation procedures with an external accounting firm, getsix® can support your company in organising its accounting processes and providing ongoing accounting services in Poland. Contact getsix® to discuss your company’s requirements and the scope of support available.

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