A company may be exempted from the requirements of s 296 of The Corporations Act if:
A) It is a small proprietary company within the definition of the Act.
B) A special meeting of 75 per cent of the shareholders convened under s 293 agrees to the preparation of financial reports that do not comply with those accounting standards.
C) The report is prepared in response to a shareholder direction under s 293 and the direction specifies that the report does not have to comply with those accounting standards.
D) It is a small proprietary company within the definition of the Act and the report is prepared in response to a shareholder direction under s 293 and the direction specifies that the report does not have to comply with those accounting standards.
E) None of the given answers.

Question

Quizplus · Accepted Answer

Section 296 of The Corporations Act requires companies to prepare financial reports that comply with accounting standards. However, small proprietary companies are exempted from this requirement. Additionally, if a shareholder direction is given under s 293, a company may be exempted from complying with accounting standards. Therefore, a small proprietary company that receives a shareholder direction under s 293 may prepare financial reports that do not comply with accounting standards. Option D is correct, as it combines both exemptions. Option B is incorrect because it does not mention the exemption for small proprietary companies. Option C is incorrect because it only applies to specific shareholder directions, and does not include the exemption for small proprietary companies. Option A is partially correct, but it is not the only answer since it does not consider the possibility of a shareholder direction to prepare non-compliant financial reports.

A Company May Be Exempted from the Requirements of S