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

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?
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.
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
C) Independent external audit gives confidence in the financial statements by including the auditor's opinion on whether or not they show a true and fair view.
D) 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 there is a need for this to be assured by independent external audit

CIMAPRA17-BA4-1 Exam - 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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Minna
8 months ago
I thought external audits were optional for smaller companies?
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Tammy
8 months ago
B and D sound similar, but I think D is more accurate.
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Lavonda
8 months ago
Wait, are we sure all companies really need audits?
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Quentin
8 months ago
Totally agree with A, external audits are crucial!
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Reuben
9 months ago
A is definitely true, directors can manipulate numbers.
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Myong
9 months ago
I practiced a question like this before, and I think the key is understanding the role of the auditor. I’m leaning towards option D being the incorrect one, but I need to double-check.
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Paris
9 months ago
I feel like option A is definitely correct because it highlights the potential for manipulation by directors, but I’m not entirely sure about the wording in option C.
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Rodrigo
9 months ago
I think options B and D are quite similar, but I can't recall if both emphasize the need for assurance from the audit.
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Malissa
9 months ago
I remember discussing how external audits are meant to provide assurance to shareholders, but I'm not sure if all the statements reflect that correctly.
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Micheline
9 months ago
Okay, let's see. The statements are all about the purpose and benefits of external audit, so I'll need to analyze each one closely to find the one that doesn't fit.
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Laquanda
9 months ago
Hmm, I'm a bit confused by the wording of the options. I'll need to read through them carefully to make sure I understand the nuances.
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Jordan
9 months ago
This question seems straightforward, I just need to identify the incorrect statement about the requirement for external audit.
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Mel
10 months ago
The key here is to focus on the specific details in each statement and determine which one is incorrect. I think I have a good strategy for approaching this.
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Starr
10 months ago
Hmm, I'm a bit unsure about the exact syntax for the `find` command here. I'll need to review the examples and make sure I get the options right.
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Julianna
10 months ago
Hmm, I'm not totally sure about this one. I know there are commands related to backup and loading data, but I can't remember the exact syntax. I'll have to think this through carefully.
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Yolando
2 years ago
I'm not sure, but I think the answer is C.
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Trina
2 years ago
I agree with Georgene, I also think the answer is B.
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Margot
2 years 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
2 years ago
Hey, at least they're not asking us to audit the auditors! That would be a real headache.
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Phyliss
2 years 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
2 years 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
2 years ago
I disagree, I believe the answer is D.
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Rickie
2 years 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
2 years ago
I think the answer is B.
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Edelmira
2 years 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
2 years 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
2 years 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
2 years 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
2 years 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
2 years 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
2 years 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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