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CIMA Exam CIMAPRA17-BA4-1 Topic 7 Question 94 Discussion

Actual exam question for CIMA's CIMAPRA17-BA4-1 exam
Question #: 94
Topic #: 7
[All CIMAPRA17-BA4-1 Questions]

The majority of developed countries require publicly quoted companies and large companies to produce annual financial statements which are then audited by an external auditor.

Which of the following statements regarding the requirement for external audit is Incorrect?

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Suggested Answer: B

by Laura at Aug 08, 2024, 04:01 AM

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Yolando
9 months ago
I'm not sure, but I think the answer is C.
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Trina
9 months ago
I agree with Georgene, I also think the answer is B.
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Margot
9 months ago
Wait, does this mean the directors can't be trusted? Shouldn't we just let them handle it themselves? Seems a bit like overkill if you ask me.
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Xochitl
9 months ago
Hey, at least they're not asking us to audit the auditors! That would be a real headache.
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Phyliss
8 months ago
B) As the directors are responsible for the day-to-day management of the company, they hold more detailed information which is resolved by the presentation of financial statements to the shareholders and this needs to be guaranteed by independent external audit.
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Glennis
9 months ago
A) Independent external audit gives confidence in the financial statements which is required as the directors have incentives to manipulate the financial statements presented to the shareholders
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Jill
9 months ago
I disagree, I believe the answer is D.
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Rickie
10 months ago
I'm going with D. The directors' detailed information needs to be independently verified, otherwise it's just a glorified self-review.
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Georgene
10 months ago
I think the answer is B.
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Edelmira
10 months ago
Hmm, I think C is the correct answer here. The auditor's opinion is the key to ensuring confidence in the financial statements.
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Stefan
9 months ago
Yes, C is definitely the right choice. The auditor's opinion provides assurance on the true and fair view of the financial statements.
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Denny
9 months ago
I agree, C is the correct answer. The auditor's opinion is crucial for confidence in the financial statements.
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Juan
10 months ago
Option B seems a bit redundant. We already know the directors have more detailed information, so the external audit just reaffirms that, right?
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Werner
9 months ago
The external audit adds credibility to the financial statements and provides assurance to shareholders about the company's financial position.
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Gail
9 months ago
I agree, having an independent external audit helps to ensure that the information presented to shareholders is accurate and reliable.
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Janey
10 months ago
Option B does seem redundant, but it's important for the external audit to confirm the information provided by the directors.
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