Skip to content

ACCA Strategic Professional · Strategic Business Leader · Reporting to stakeholders

Dunmore Bank's board wants its annual report to give stakeholders confidence about risk management. Which disclosure would be most useful to shareholders in assessing this?

The most useful disclosure is a board statement confirming it reviewed risk management and internal control effectiveness, identifying principal risks, how they are managed and any significant weaknesses. This gives stakeholders evidence of actual oversight, unlike a list of policies, claims of no risk, or audit fee information.

  1. AA statement that the board has reviewed the effectiveness of risk management and internal control, identifying principal risks, how they are managed and any significant weaknesses foundCorrect
  2. BA list of all risk policies with no reference to their operation
  3. CA general assurance that the bank has no material risks
  4. DA summary of the audit fee and non-audit services only

Explanation

Useful risk reporting identifies principal risks, explains mitigation, and confirms that the board has reviewed effectiveness, including disclosure of significant weaknesses. Listing policies without operation says nothing about effectiveness, a claim of no material risks is implausible for a bank, and audit fees address auditor independence rather than risk management.

Did you get it right without looking?

One question tells you little. A timed set on Reporting to stakeholders shows your real accuracy, how long you take and where you lose marks.

Practise Reporting to stakeholdersFree diagnostic mock

More Reporting to stakeholders questions