Question

Which of the following statements about the annual report are true? (Select all that apply.)

Check All That Apply

• Annual reports of public companies include an assessment of the company's internal control procedures.

• The company's auditor prepares the financial statements while its management prepares the other information and disclosures required in the annual report.

• The management's discussion and analysis section of the annual report provides an unbiased perspective of a company's operations, liquidity, and capital resources.

• The proxy statement contains disclosures on compensation to directors and executives.

Answer 1

The correct answer for the question is Option A - Annual reports of public companies include an assessment of the company's internal control procedures. and Option D - The proxy statement contains disclosure on companesion to directors and executives. Both these options are correct as these represent the true characteristics of Annual statements. It is the duty of the public companies to include an assessment of company internal control procedures and to include the details of the compensation to directors and executives within the proxy statement.

Option B is incorrect. The auditor does not prepare the financial statements and merely does opine on the financial statement. Financial statements are prepared by the Management. As such, this option is incorrect.

Option C is incorrect. The Management discussion and analysis generally provides a biased view company's operations, liquidity and capital resources.

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