1. . In addition to the financial statements and the accompanying notes, corpora
ID: 2393798 • Letter: 1
Question
1. . In addition to the financial statements and the accompanying notes, corporate annual reports normally include which of the following sections?
a- Management Discussion and Analysis
b- Report on Internal Control
c- Report on Fairness of the Financial Statements
d- All of these choices are correct.
2. Typical items included in the MD&A include all the following EXCEPT
a- management’s analysis and explanations of any significant changes between the current and prior years’ financial statements.
b- important accounting principles or policies that could affect interpretation of the financial statements, including the effect of changes in accounting principles or the adoption of new accounting principles.
c- management’s assessment of the company’s liquidity and the availability of capital to the company.
d- management’s assessment of the effectiveness of internal controls over financial reporting.
Explanation / Answer
Answer 1-d. All of these choices are correct. In addition to the financial statements and the accompanying notes, corporate annual reports normally include the following sections: 1. Management Discussion and Analysis 2. Report on Internal Control 3. Report on Fairness of the Financial Statements Answer 2-d. management’s assessment of the effectiveness of internal controls over financial reporting. Typical items included in the MD&A are: 1. management’s analysis and explanations of any significant changes between the current and prior years’ financial statements. 2. important accounting principles or policies that could affect interpretation of the financial statements, including the effect of changes in accounting principles or the adoption of new accounting principles. 3. management’s assessment of the company’s liquidity and the availability of capital to the company. 4. Significanty risk exposures that might affect the company. 5. Any "off-balance-sheet" arrangements such as leases not included directly in the financial statements.
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