ICAEW ARF · Chapter 1 · Question 2 of 10
In the statutory audit of a UK limited company, which party is the 'responsible party' in the three-party relationship?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) The company's directors
Explanation
The responsible party is the party responsible for the subject matter, which for financial statements is the directors who prepare them. The shareholders are the intended users, and the audit partner represents the practitioner. The Registrar simply receives the filed accounts and is not a party to the engagement.
More The concept of and need for assurance MCQs
- Q4What is the main reason why the shareholders of a large company need an independent audit of its financial statements?
- Q5Which of the following is NOT an inherent limitation of an audit?
- Q6Which of the following public perceptions is an example of the 'expectation gap' in auditing?
- Q7Which of the following engagements is NOT an assurance engagement?
- Q8Which of the following statements about an agreed-upon procedures engagement is correct?