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ACCA Applied Knowledge · Financial Accounting · Duties and responsibilities of those charged with governance

Which of the following is normally included in a directors' responsibility statement accompanying a company's annual financial statements?

A directors' responsibility statement says the directors are responsible for preparing the financial statements and keeping adequate accounting records. The opinion on whether they give a true and fair view is the auditor's, and directors never guarantee future profits.

  1. AA statement that the directors are responsible for preparing the financial statements and for keeping adequate accounting recordsCorrect
  2. BAn opinion on whether the financial statements give a true and fair view
  3. CA guarantee of the company's future profits to shareholders
  4. DA list of the auditor's fees negotiated with the tax authority

Explanation

A directors' responsibility statement sets out that the directors are responsible for the preparation of the financial statements and for the supporting accounting records and controls. The opinion on true and fair presentation is given by the auditor in the audit report. Directors do not guarantee future profits.

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