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CS Executive · Company Law and Practice · Accounts and Auditors

Under Section 143(3), which of the following must the auditor's report state?

The auditor's report must state whether the company has adequate internal financial controls with reference to financial statements and whether they operate effectively. Section 143(3)(i) lists this, whereas dividend adequacy, pay reasonableness and share valuation are not listed.

  1. AWhether the company has adequate internal financial controls with reference to financial statements and their operating effectivenessCorrect
  2. BWhether the dividend declared is adequate
  3. CWhether the directors' remuneration is reasonable in the market
  4. DWhether the company's share price is fairly valued

Explanation

Section 143(3)(i) requires the report to state whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls. The other matters are not listed in that sub-section.

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