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Concept and Need For Assurance
Concept and Need For Assurance
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The directors have a Stewardship role. They look after the assets of the company and manage them on behalf of the
shareholders. In small companies, the shareholders may be the same people s the directors. However, in most of the
large companies, the two groups are different.
The relationship between the shareholders and the board of directors is also an application of the general legal
principle of Agency. The board of directors has a legal duty to act in the best interests of the shareholders, and
should be accountable to the shareholders for everything that he does as agent.
In order to show their Accountability to the shareholders, it is a general principle of company law that directors are
required to prepare annual financial statements, which are presented to the shareholders for their final approval.
Prepared By:
Team Audit and Assurance CAF-09
Italic shows either definition or other key points.
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Prepared By:
Team Audit and Assurance CAF-09
Italic shows either definition or other key points.
For suggestions text on fb.com/AuditandAssurance