What is the role of the board of directors in the financial reporting process?

The board of directors plays a crucial role in overseeing the financial reporting process, with particular emphasis on the importance of approving and signing the accounts. This responsibility is integral to their duty of care and loyalty to the shareholders. By reviewing and approving the financial statements, the board ensures that the reports provide an accurate representation of the company's financial position and performance, which is essential for stakeholders, including investors and creditors.

Approving and signing the accounts signifies that the board has fulfilled its responsibility to ensure that the financial statements are prepared in accordance with applicable accounting standards and regulations. It encompasses the board's oversight function, ensuring that the company is transparent and accountable in its financial practices.

While querying internal auditors and ensuring compliance with regulations are important functions, they are part of a broader oversight role rather than the specific act of finalizing financial reports. Preparing financial statements is typically the responsibility of management and financial officers, not the board itself. The board reviews and approves these statements to add an additional layer of scrutiny and validation in the financial reporting process.