Accounting Multiple Choice Question – 16 January 2025

Alex plc has been strengthening its accounting and finance function.

Alex plc has been told that two purposes of their published and audited financial statements are to help users to assess how effectively managers are running the business and to make judgements about the likely levels of risk and return in the future.

Which of the following user groups of Alex plc’s published, audited financial statements is most likely to use accounting information for these purposes?

Select ONE answer:

1. Community representatives
2. Employees
3. Shareholders
4. Managers

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == > Managers have stewardship over resources owned by the shareholders, so the shareholders use the financial statements to assess the quality and effectiveness of their stewardship. Shareholders own shares (which are risky investments) in the hope of earning a satisfactory return.
4. Not correct

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