Financial statements are prepared for the user. Which of the following best describes the responsibility for the preparation of financial statements?

Question

Quizplus · Accepted Answer

It is the responsibility of the company's management to prepare and present financial statements. Management is tasked with ensuring that these statements accurately reflect the financial position and performance of the company in accordance with applicable accounting standards and regulations. External auditors, on the other hand, are responsible for auditing these statements to provide assurance that they are free from material misstatement. Shareholders are the users of the financial statements, not preparers, and standard setters are responsible for establishing the accounting rules and standards that guide the preparation of financial statements, not for preparing the statements themselves.

Financial Statements Are Prepared for the User