ACCA Applied Knowledge · Financial Accounting · Duties and responsibilities of those charged with governance
Who is primarily responsible for preparing financial statements that give a true and fair view (fair presentation) of a company's financial position and performance?
The directors are responsible for preparing financial statements that present fairly the company's position and performance. The auditor's role is limited to giving an independent opinion on those statements, while shareholders and tax authorities do not prepare them.
- AThe external auditor
- BThe directors of the companyCorrect
- CThe company's shareholders
- DThe tax authority
Explanation
Directors are responsible for preparing the financial statements and maintaining adequate accounting records. The external auditor only expresses an opinion on them, so choosing the auditor confuses the audit role with the preparation role.
Did you get it right without looking?
One question tells you little. A timed set on Duties and responsibilities of those charged with governance shows your real accuracy, how long you take and where you lose marks.
More Duties and responsibilities of those charged with governance questions
- Which of the following is a duty of the directors of a company in respect of going concern when preparing the financial statements?
- A listed company's board consists of the chief executive officer (CEO), who is also chair of the board, the finance director, and two non-ex…
- A listed company's board wants to reduce the agency problem by aligning directors' interests with those of shareholders. Which remuneration …
- Which of the following statements about the directors' responsibility for internal control is correct?
- Which of the following circumstances would MOST seriously threaten the independence of a non-executive director of a listed company?
- Which statement about the responsibilities of directors for the financial statements of a company is correct?