Accounting Multiple Choice Question – 26 May 2025

Shareholders often believe the external (or statutory) auditor’s opinion means that the financial statements of a company are ‘correct’.

If the published financial statements are subsequently found to be ‘incorrect’, perhaps due to a fraud, shareholders then blame the auditor, but responsibility for preventing and detecting fraud and error lie with?

Select ONE answer:

1. The directors of the company only
2. The directors and management of the company
3. The management of the company only
4. The company’s audit committee

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 2

1. Not correct
2. Correct == > Both the directors and the management have responsibility as senior management to protect the company against fraud and irregularity.
3. Not correct
4. Not correct

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