Draft law would modernise bookkeeping and end reviewer requirement

A draft bill to replace Iceland’s 1994 bookkeeping law would update rules for digital accounting and remove the general requirement for companies to appoint accounting reviewers, mbl.is reports.

The draft has been published for public consultation. It aims to bring the law into line with current practice, in which bookkeeping is largely handled and stored electronically.

Under the proposal, companies covered by the annual accounts legislation would generally have to keep their books in an electronic accounting system. Companies within the size limits for micro-enterprises would be exempt, to avoid imposing significant costs and work on smaller businesses.

The draft would also clarify responsibility for bookkeeping, the recording and correction of entries, and the retention of and access to accounting documents. It would set out rules for annual accounts prepared by entities not covered by other annual accounts legislation.

Current rules assume that accounting documents are stored in a specified physical location. The article notes that digital records are now often held in cloud services and may be stored in multiple locations, making it difficult for businesses to comply with the requirement to keep records in Iceland. The proposed rules aim to ensure that records are stored securely and can be accessed when needed.

The draft would end the general obligation to appoint accounting reviewers. Views differ on the value of their work, and there has been no oversight of reviewers’ work or qualifications. Companies that choose to appoint a reviewer would face more detailed requirements, and the minister could set further qualification rules by regulation.

The existing bookkeeping law has been in force since 1994.