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ACCA Applied Knowledge · Business and Technology · Accounting and finance functions within business organisations

Which of the following best describes the role of the financial control function in a business?

Financial control ensures accurate accounting records, produces financial and management reports and monitors compliance with internal controls and budgets. Negotiating loans, hedging currency risk and investing surplus cash are treasury tasks, and dividend policy is a board decision rather than a financial control responsibility.

  1. ANegotiating long-term loan facilities with banks and arranging foreign currency hedges
  2. BEnsuring accurate accounting records, producing financial reports and monitoring compliance with internal controlsCorrect
  3. CDeciding the investment of surplus cash in money market instruments
  4. DSetting the company's dividend policy independently of the board

Explanation

Financial control maintains the accounting records, prepares financial and management reports and monitors adherence to controls and budgets. Arranging loans, hedging and investing cash are treasury activities. Dividend policy is decided by the board, not by the control function.

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