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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board Disclosures and Website Disclosures

Meridian Steels Ltd is a listed company. Its draft Directors' Responsibility Statement covers accounting standards, accounting policies, adequate accounting records, going concern and compliance systems for applicable laws. Which further statement must it contain because the company is listed?

A listed company's Directors' Responsibility Statement must also state that the directors had laid down internal financial controls that are adequate and were operating effectively. This extra limb applies only to listed companies, alongside the other statements on standards, policies, records, going concern and compliance systems.

  1. AThat the directors laid down internal financial controls that are adequate and operating effectivelyCorrect
  2. BThat the dividend will exceed the previous year's dividend
  3. CThat the auditor has been reappointed for five years
  4. DThat the company has no related party transactions

Explanation

Section 134(5)(e) requires, in the case of a listed company, a statement that the directors had laid down internal financial controls to be followed and that they are adequate and were operating effectively. The other options are not part of the Directors' Responsibility Statement.

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