Date posted: 16/11/2017 1 min read

Directors' guide for financial reporting

A new guide by CA ANZ sets out everything directors need to know to meet their financial reporting responsibilities

In Brief

  • Directors' are primarily responsible for the quality of financial reports
  • A new guide by CA ANZ sets out everything directors need to know to meet this obligation
  • Directors' Responsibilities for Financial Reporting helps directors engage in the reporting process

Being a director is a big responsibility, and while directors are not expected to be accounting experts, they do have a duty of care to the organisation they are governing. That means the buck typically stops with directors when it comes to the how well an entity fulfills its financial reporting obligations.

Directors have primary responsibility for the provision of useful and meaningful information for investors and other users of the financial statements.

However, this responsibility can only be met when directors understand their role in relation to financial reporting. A new guide by CA ANZ and ACCA entitled “Directors'  Responsibilities for Financial Reporting” sets out everything directors need to know to meet this obligation.

"Directors' Responsibilities for Financial Reporting encourages directors to be engaged and seek explanations to support accounting treatments chosen.”

A focus on five key questions

The guide is structured around five key questions:

  1. Who is responsible for financial reporting?
  2. Why are directors responsible for financial reporting?
  3. What are directors responsible for in relation to financial reporting?
  4. How do directors discharge their financial reporting responsibilities?
  5. When do directors discharge their financial reporting responsibilities?

The explanations are written in plain English with additional tips on areas of common confusion such as “solvency versus going concern”. The end result is a user-friendly guide that encourages directors to be engaged and seek explanations to support accounting treatments chosen. It also aims to give directors the confidence, where appropriate, to challenge the accounting decisions applied in a financial report.

“Directors' Responsibilities for Financial Reporting” is worth sharing with your clients. It’s a useful tool to add value to your service while also educating clients on a role that can carry far more responsibility than many directors may realise.

Clear answers for directors

Directors' Responsibilities for Financial Reporting – a useful tool for your clients.

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