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IAI Actuarial Core Principles · Business Finance · Construction and features of company accounts and reports

Which user group is most likely to use the directors' report and statement of corporate governance in the annual report primarily to assess how management has discharged its stewardship of shareholders' funds?

Shareholders are the group that uses the directors' report and governance statement to judge stewardship, meaning how well management has looked after and used the funds the owners provided. Customers, competitors, casual visitors and one-off cash suppliers have far less interest in this accountability role.

  1. AShareholdersCorrect
  2. BCustomers buying a single product
  3. CCompetitors preparing price lists
  4. DCasual website visitors
  5. Suppliers offering a one-off cash sale

Explanation

Stewardship is the accountability of management to the owners for resources entrusted to them, so shareholders are the group most concerned with it. Others have little interest in this aspect or little right to detailed use of it.

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