Preparation and Signing of the Annual Financial Statement: A Step-by-Step Guide

Preparation and signing of the annual financial statement are one of the most important and difficult tasks faced by every entity which keeps accounting books. The said process requires not only accuracy but also complete compliance with the applicable regulations. In order to facilitate its realization, we would like to present a detailed step-by-step guide that describes the actions required in drawing up and signing of the financial statement.

Preparation of the annual Financial Statement

1. Inventory: Carry out the inventory of assets and liabilities to confirm their existence, status and value. Results of the inventory are the basis for corrections in the accounting entries.
2. Balance reconciliation: Verify and reconciliate the account balances in order to make sure that all the economic transactions have been posted correctly.
3. Preparation of the preliminary balance sheet and the profit and loss account: Prepare the preliminary balance sheet and the profit and loss account based on the closed accounting books.
4. Verification and corrections: Verify the preliminary balance sheet and the profit and loss account. Make the necessary corrections resulting from inventory discrepancies or accounting errors.
5. Preparation of the full financial statement: Once all the corrections are complete, prepare the full annual financial statement. The document should be signed by a person who was entrusted in the bookkeeping and by the head of the entity.
6. Approval of the financial statement: The financial statement should be handed over for approval by the relevant approving body e.g., the general meeting. This must take place within 6 months from the end of the financial year.
7. Closure of the accounting books: Close the accounting books at the end of the financial year. The final closing should take place within 15 days from the date on which the financial statement was confirmed. All economic transactions must be posted and reconciliated.

Signing the Financial Statement

1. By whom?
   The financial statement must be signed by the person responsible for the bookkeeping and by the head of the entity. In case of a multi-person management, the statement must be signed by all members. If the composition of the management changed after the balance sheet date, it must be signed by all the current members.
   Who is the head of the entity? The Polish Accounting Act defines the head of the entity as: a member of the management board or another management body, partner managing the company’s affairs, general partner, liquidator, official receiver, administrator in restructuring procedure, or succession manager.
2. Are all members of the management board obligated to sign the financial statement?
   If the entity is managed by a multi-member body, the financial statement can be signed by at least one person, provided that other persons file a written declaration on the compliance of the statement with the requirements provided by the act.
3. Can someone refuse to sign the statement?
   The member of the management board can refuse to sign the statement, but they must file a written declaration with a justification for their refusal. Such a declaration is attached to the financial statement.
4. Deadline for signing the financial statement?
   The financial statement should be signed within a deadline sufficient for its approval by the approving body (e.g., the general meeting of shareholders) within three months from the balance sheet date.
5. Form of signing the financial statement?
   The financial statement must be signed by electronic means. The act provides for the use of a qualified electronic signature (paid option), a certified signature (free option) or a personal signature (electronic identity card). Hints about the electronic signature: (1) Before signing, check whether the certificates of the electronic signature are valid. (2) Keep the correct order of signatures: first, the statement must be signed by the person responsible for accounting books, then by the head of the entity. (3) Signatures must be affixed in the same document. Do not sign copies that no longer have affixed signatures. (4) Do not make any changes in an already signed financial statement. Any changes will result in the failed verification and rejection of the statement.
6. What to do in case of a refusal to sign the statement?
   If the person responsible for the accounting books or the head of the entity refuses to sign the statement, you need to:

• Determine the reasons for the refusal: contact the person who refused to sign the statement to understand the reasons.
• Verify the statement: correct the possible errors. Consult the auditor, if the statement is subject to an audit.
• Arrange mediation: in case of differences in interpretations, meet the parties concerned.
• Prepare the declaration of refusal: if the person still refuses to sign the financial statement, they must draw up a written declaration that will be enclosed to the documentation filed in the Polish National Court Register.

Audit and approval of the Financial Statement

The financial statement must be audited by an auditor who can issue:

• An unmodified opinion: The financial statement meets the requirements.
• A modified opinion: In case of material misstatements or the lack of sufficient evidence, the auditor can issue an opinion with reservations, a negative opinion, or refrain from expressing an opinion.

The financial statement is approved by the approving body, e.g. the general meeting, within 6 months from the end of the financial year. Events with an impact on the financial statement that occurred before its approval must be added to the statement and the statement must be signed again.

Disclosure and sending of the Financial Statement

The financial statement must be disclosed to the partners or shareholders at least 15 days before the general meeting. The documents are filed electronically to the Polish National Court Register or the Polish National Tax Administration, depending on the type of entity.

author: Julia Leszczyńska, Accounting Assistant, MDDP Outsourcing Katowice

We invite you to read the remaining articles in the ‘Financial Report 2025’ series:

1. Schedule of Works on the Financial Statement: The Key to Effective Reporting
2. Determining the Form of Financial Reporting: Key Aspects
3. Audit Obligation and Selecting the Auditing Company: Key Aspects
4. Inventory of Assets and Liabilities and Their Valuation
5. Valuation of Assets and Liabilities on the Balance Sheet Date
6. Preparation and Signing of the Annual Financial Statement: A Step-by-Step Guide
7. Consolidation of Financial Statements: Key Rules and Requirements
8. E-Statements: A Guide to Electronic Reporting of Financial Statements
9. Sending a Financial Statement After the Deadline: Consequences and Procedures

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