ACCA Applied Knowledge · Financial Accounting · Stakeholders' needs
Kestrel Ltd's finance director produces a weekly report for the board showing sales by region, cash balance and orders received to date. Which statement about this report is correct?
The weekly report is management information produced for internal use. Management decides its content, format and frequency, and there is no legal requirement to comply with IAS 1 or file it with a regulator, because those rules apply to published financial statements.
- AIt is a financial statement because it contains sales figures
- BIt is management information, produced for internal use, with no legal requirement as to its content or frequencyCorrect
- CIt must be filed with the regulator as it includes cash balances
- DIt must comply with IAS 1 because it is given to directors
Explanation
A weekly board report is internal management information. Its content, format and frequency are chosen by management, and IAS 1 and filing rules apply only to published general purpose financial statements. Containing sales or cash figures does not make it a financial statement.
Did you get it right without looking?
One question tells you little. A timed set on Stakeholders' needs shows your real accuracy, how long you take and where you lose marks.
More Stakeholders' needs questions
- Which of the following users is most likely to have the power to demand management information tailored to its own needs, rather than relyin…
- Which one of the following statements about the time orientation and scope of information is correct?
- Which user group of a company's financial statements is most directly concerned with assessing whether the company will be able to pay amoun…
- Which of the following best describes a key difference between management accounts and published financial statements of a company?
- Which of the following users of financial statements is able to demand specially tailored information from an entity, rather than relying so…
- According to the IFRS Conceptual Framework, what is the objective of general purpose financial reporting?