In the context of a large public utility company, which of the following is strictly the responsibility of the external auditor rather than the board of directors?

Answer options:

Implementing and maintaining an effective system of internal controls.

Preparing the financial statements in accordance with applicable accounting standards.

Expressing an independent opinion on whether the financial statements present a true and fair view.

Preventing and detecting all instances of fraud within the organization.

How to approach this question

Distinguish between the duties of management (preparation, controls) and auditors (examination, opinion).

Full Answer

C.Expressing an independent opinion on whether the financial statements present a true and fair view.✓ Correct

The directors are responsible for preparing the financial statements and maintaining internal controls. The external auditor is responsible for examining those statements and expressing an independent opinion on whether they give a true and fair view.

Common mistakes

Assuming auditors are responsible for preparing the accounts or preventing fraud.

Question 02 All questions Question 04

Practice the full ACCA FA — Financial Accounting Practice Exam 3

65 questions · hints · full answers · grading

More questions from this exam

Q01GlobalWater NGO, a non-governmental organization providing clean water solutions, is preparing it...Easy Q02NexusTech, a cross-border multinational software company, operates in 15 different countries. Why...Medium Q04Quantum AI, a tech startup, is developing a revolutionary algorithm. The directors want to capita...Medium Q05AgriGrow, a large agricultural firm, recently changed its method of depreciating tractors from th...Medium Q06Aviation Services Ltd has suffered severe financial difficulties due to a global travel downturn....Medium

View all 65 questions →