Skip to content

IAI Actuarial Core Principles · Business Finance · Regulation of financial reporting of incorporated entities

Which responsibility belongs to the directors rather than to the external auditor?

Maintaining adequate accounting records and preparing financial statements that give a true and fair view is the directors' responsibility. The auditor only forms and reports an independent opinion, gathering evidence and reviewing going concern, but does not prepare the statements.

  1. AExpressing an opinion on the financial statements
  2. BObtaining sufficient appropriate audit evidence
  3. CMaintaining adequate accounting records and preparing financial statements that give a true and fair viewCorrect
  4. DReporting to members on the audit findings
  5. Assessing whether the going concern assumption is appropriate in the audit evidence reviewed

Explanation

Directors are responsible for keeping proper accounting records and preparing the financial statements. The auditor expresses an opinion, gathers evidence and reports to members, and also considers going concern from an audit perspective.

Did you get it right without looking?

One question tells you little. A timed set on Regulation of financial reporting of incorporated entities shows your real accuracy, how long you take and where you lose marks.

Practise Regulation of financial reporting of incorporated entitiesFree diagnostic mock

More Regulation of financial reporting of incorporated entities questions