ACCA Applied Knowledge · Financial Accounting · Stakeholders' needs
Which of the following best describes a key difference between management accounts and published financial statements of a company?
Management accounts are prepared mainly for internal decision-making and need not follow any mandatory format, whereas published financial statements are prepared for external users and must follow a regulatory framework such as IFRS Accounting Standards and company law.
- AManagement accounts must follow IFRS Accounting Standards, while published financial statements may use any format
- BManagement accounts are prepared mainly for internal decision-making and have no mandatory format, while published financial statements follow a regulatory frameworkCorrect
- CManagement accounts are audited annually, while published financial statements are not
- DManagement accounts are produced only once a year, while published financial statements are produced monthly
Explanation
Management accounts serve internal users such as managers, can be in any format and cover any period. Published financial statements are prepared for external users and must comply with IFRS and law. Option A reverses this, and C and D reverse the audit and frequency position.
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
- Zeta Co's directors are assessed by shareholders on how well they have protected and used the entity's assets during the year. Which concept…
- 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 of the following is a reason why published financial statements are unlikely to meet all the information needs of a company's senior m…
- Kestrel Ltd's finance director produces a weekly report for the board showing sales by region, cash balance and orders received to date. Whi…
- 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…