Who is responsible for the preparation and integrity of a companys financial statements?
|
The following statement, which should be read in conjunction with the auditors’ responsibility stated in the auditors’ report set out on Independent Auditor’s Report, is made with a view to distinguishing the respective responsibilities of management and those of the auditors in relation
to the consolidated financial statements of Public Joint Stock Company "Mining and Metallurgical Company Norilsk Nickel" and its subsidiaries (the "Group"). Management of the Group is responsible for the preparation of the consolidated financial statements that present fairly in all material aspects the consolidated financial position of the Group as at 31 December 2018 and consolidated statements of income, comprehensive income, cash flows and changes in equity for the year
then ended, in accordance with International Financial Reporting Standards (“IFRS”). In preparing the consolidated financial statements, management is responsible for: Management, within its competencies, is also responsible for: The consolidated financial statements for the year ended 31 December 2018 were approved by: President Senior Vice President – Chief Financial Officer S.G. Malyshev Moscow, Russia When companies register their securities with the U.S. Securities and Exchange Commission and file annual and other reports, they must disclose important financial information. In many cases, this information must be audited. This publication describes the role of the auditor in reviewing a company's financial books and records. What Is an Auditor?An auditor is an independent certified public accountant who examines the financial statements that a company's management has prepared. The federal securities laws require publicly held companies that file reports with the SEC to submit financial statements that are accurate, truthful, and complete and prepared according to a set of accounting standards called "Generally Accepted Accounting Principles" (or "GAAP"). Many of these financial statements - including those in the company's annual report and those provided to shareholders in connection with the solicitation of proxies for annual meetings - must be examined and reported on by an independent auditor. What Do Independent Auditors Do?A company's outside, independent auditor examines the company's financial statements and provides a written report that contains an opinion as to whether the financial statements are fairly stated and comply in all material respects with GAAP. In addition, some companies also use internal auditors to review the financial reporting processes and internal accounting controls to assure that the company's systems are appropriately designed and operating effectively. Who Prepares a Company's Financial Statements?A company's management has the responsibility for preparing the company's financial statements and related disclosures. The company's outside, independent auditor then subjects the financial statements and disclosures to an audit. During the audit, the outside auditor obtains an understanding of the company's internal controls and then applies "auditing procedures," which may include inspection of the company's books and records, observation, inquiries, and confirmations. The procedures the outside auditor uses must be sufficient to allow the auditor to obtain enough competent evidence to express an opinion on the fairness of the financial statements and whether they conform to GAAP in all material respects. If the auditor cannot reach that conclusion, then the auditor must either require the company to change the financial statements or decline to issue a standard audit report. What's the Purpose of an Audit?An audit provides the public with additional assurance — beyond managements' own assertions — that a company's financial statements can be relied upon. As the U.S. Supreme Court stated in the landmark case of U.S. v. Arthur Young: "The SEC requires the filing of audited financial statements in order to obviate the fear of loss from reliance on inaccurate information, thereby encouraging public investment in the Nation's industries." That has important implications for investors making investment decisions, for banks and financial institutions that may extend credit or make loans to the company, and for other businesses and members of the public who deal with the company. How Can I Find Out Who Audits a Particular Company?The best way to identify the auditor of a publicly traded company is to check the company's most recent filings using our EDGAR database of corporate filings. You'll find the identity of the company's auditor in its annual report on Form 10-K. Look for the "Accountant's Report" under Item 8 of the Form 10-K. Whenever a company hires a new auditor to certify its financial statements, it must announce that news on Form 8-K (under Item 4) within 5 business days. Be sure to check any Form 8-K filings submitted after the company's most recent annual report to find out whether the company subsequently hired a new auditor. A variety of commercial resources exist that list publicly traded companies and their auditors. Some resources also list major auditing firms and the publicly traded companies they audit. You should be able to find these resources at your local public library or the nearest law or business school library. You can also find much of the information contained in these resource materials on the Internet. What Else Should I Know?In addition to serving as auditors, some accounting firms offer non-audit consulting services to their audit clients. You can check a company's annual proxy statement for information concerning the company's relationship to its independent auditor and the extent of other services the auditor might be performing for the company. For example, the company's proxy statement should disclose the fees for audit, information technology consulting, and all other services provided by the company's auditors during the last fiscal year. For more information about investing wisely, please visit the Investor Information section of our website. Who is responsible for the integrity of the financial statements?Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment and gives due consideration to materiality.
Who is responsible for the proper preparation and presentation of financial statements?In a review, management takes responsibility for the preparation and presentation of the entity's financial statements, while the accountant should have a sufficient level of knowledge of both the industry and the entity to review the financial statements.
|
