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4QQMN501

Section C – Testing your understanding of financial reporting in in the business world

Answer ONE question from this section

(e.g. Question 4 or Question 5)

Question 4

As a company director, you are responsible for not only the faithful representation of your company’s financial statements, but also depending on the size of your company, you will also be required to offer management commentary via the directors’ report and strategic report. Please critically discuss the main qualitative characteristics that management commentary should possess and what it offers the users of accounting information beyond what is offered by the financial statements.

(30 marks)

Question 5

IAS 1 requires that as a company director, any financial statements you produce must show a ‘faithful representation’; why is this term used rather than ‘accurate’ or ‘correct’? Please offer a critical debate, offering arguments both for and against accounting standards allowing company directors to use reasonable judgments when preparing their financial statements.

(30 marks)

(Maximum word count limit for Q4 and Q5 - 1000 words)

Answer only one of the above questions.

Marking Criteria and Weightings for Q4 and Q5