CFA Level I · CFA Level I Exam · Introduction to Financial Statement Analysis
Which of the following statements best describes the role of management in relation to financial statements?
Management is responsible for preparing the financial statements and related disclosures. The independent auditor, not management, expresses an opinion on whether they are fairly presented in accordance with the applicable standards. Management cannot dictate the wording of that opinion.
- AManagement selects the auditor's opinion wording
- BManagement is responsible for preparing the financial statements and the related disclosuresCorrect
- CManagement is responsible for expressing an opinion on the fairness of the statements
Explanation
Management prepares the financial statements and is responsible for them, while the auditor independently expresses an opinion on whether they are fairly presented. Management does not choose the audit opinion.
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