ACCA AA · Chapter 1 · Question 7 of 8
A bank has asked a practitioner to provide assurance on a cash flow forecast prepared by the directors of Ostrander Co, which the bank will use to decide whether to extend a loan. In this engagement, which party is the 'responsible party'?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The directors of Ostrander Co
Explanation
The responsible party is the party responsible for the subject matter, which here is the directors who prepared the forecast. The bank is the intended user of the assurance report and the practitioner is the party providing assurance. Shareholders are not involved in this particular engagement.
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