Who is responsible for preparing financial statements?
A) The CPA firm that audits the financial statements
B) Management of the company
C) A company's accounting department
D) The FASB

Question

Quizplus · Accepted Answer

It is the responsibility of the management of the company to prepare the financial statements, including the income statement, balance sheet, and cash flow statement. They must ensure that the statements fairly represent the financial position of the company and comply with accounting standards. While a CPA firm may audit the financial statements, they are not responsible for their preparation. The accounting department may assist in the preparation process, but ultimately it is the responsibility of management. The FASB is responsible for setting accounting standards but does not prepare individual companies' financial statements.

Who Is Responsible for Preparing Financial Statements