ACCA Applied Knowledge · Financial Accounting · Stakeholders' needs
Which of the following is a duty of the external auditor of a company?
The external auditor reports to the members, giving an independent opinion on whether the financial statements give a true and fair view in line with the reporting framework. Preparing the statements and designing internal controls remain management responsibilities.
- APreparing the financial statements for approval by the board
- BReporting to the members on whether the financial statements give a true and fair viewCorrect
- CDesigning the company's system of internal control
- DApproving the dividend to be paid to shareholders
Explanation
The external auditor reports independently to the members on whether the financial statements give a true and fair view and are prepared in accordance with the reporting framework. Preparing statements and designing controls are management responsibilities, and dividends are proposed by directors and approved by shareholders.
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