Briefing / How to review and scrutinise the annual accounts

Within the current financial context, good governance is more important than ever. Non-executive directors need to appropriately challenge financial reports during the year and at the year-end. This briefing sets out a series of questions that non-executive directors (NEDs) could ask at board and audit committee meetings to assess how things are going in financial and governance terms and to identify any areas of potential concern.

It is important that NEDs feel able to ask questions and understand why they’re asking them. Although some of the questions relate primarily to the annual accounts, they could also be used when reviewing the monthly or quarterly financial position.

The questions are grouped under six headings, namely:

• overall performance
• accounts preparation 
• statement of comprehensive income/ statement of comprehensive net expenditure
• statement of changes in taxpayer’s equity
• statement of financial position 
• statement of cash flows. 

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