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CS Executive · Company Law and Practice · Accounts and Auditors

Kaveri Foods Ltd is a listed company. Its Board is drafting the Directors' Responsibility Statement. Which of the following statements must be included ONLY because the company is listed?

The statement that the directors laid down internal financial controls which are adequate and operating effectively is required only for a listed company. The other statements, such as going concern, accounting standards and maintenance of accounting records, apply to companies generally under the Directors' Responsibility Statement.

  1. AThat the annual accounts were prepared on a going concern basis
  2. BThat applicable accounting standards were followed with explanation of material departures
  3. CThat the directors laid down internal financial controls that are adequate and operating effectivelyCorrect
  4. DThat proper and sufficient care was taken for maintaining adequate accounting records

Explanation

Under section 134(5)(e), the statement on internal financial controls being laid down, adequate and operating effectively is required in the case of a listed company. The going concern, accounting standards and accounting records statements apply to every company that must give the statement. So the internal financial controls statement is the one linked to listing.

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