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ACCA Applied Knowledge · Financial Accounting · The regulatory framework

Which of the following users is most likely to rely on regulated published financial statements because it cannot obtain internal management information?

A potential external investor. Such a user has no access to internal management information, so it depends on published financial statements. Regulation ensures those statements are reliable and comparable. Directors and managers can get detailed internal information directly.

  1. AThe finance director
  2. BA potential external investorCorrect
  3. CThe production manager
  4. DThe internal budget committee

Explanation

External parties such as potential investors cannot request internal management accounts, so they depend on published statements prepared under regulation. Directors and managers have access to internal information.

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