Acca financial Accounting (FA) Study Text ac ca (FA)

Chapter 2 

KAPLAN PUBLISHING

 

33 

In order to be accountable to the stakeholders of the business the directors of a 

company are responsible for preparing various documents and reports. One of 

the most important reports is the financial statements. These provide a 

summary of the financial performance and position of the business. This 

information is crucial for the shareholders in particular, who need to be able to 

assess the success of the business during the financial period and the affect 

this has had on their own personal wealth. 

The directors of a company are responsible for ensuring that the company has 

an effective system in place for adequately identifying, recording, and 

summarising all the transactions and events that take place during the year. 

They must ensure that the controls that exist within that system are sufficient to 

both prevent and detect fraud and error within the system. They are also 

responsible for monitoring that system to ensure that the controls and 

procedures are being rigorously applied.