30th Oct, 2020
Annual financial statements are signed by the directors of an organization.
If there are two directors of the company, then the two directors can sign the annual financial statements.
Whenever an audit report is signed, then it is up to the directors that they sign the annual financial statement on same day or within a one day after the signed day. At the date of signing, the directors who sign the statements, must be the current position of director/s of the organisation.
Sometimes, on the behalf of company management, the chairman of board of directors of company, the chief executive officer, president and chief operating officer maybe requested to sign the financial statements. The combination of these four signthese four signatures on the financial statements can establish a great level of surety that the statements are clear and accurate.
In this way, there is not ambiguity left out that wrong information is present which must be signed out by the authorised persons. Therefore, it is clear that the main authorised person of signing the financial statement is an Executive or Director of the organisation who is responsible for managing and running the business in the best way, and in this manner it ensures that there exists transparency and accuracy in the financial statement.
There is great responsibility in signing the financial statements as firstly they ensure that all information present on the statements are is correct and perfect. There cannot by any type of ambiguity which can lead towards misinformation present in the statements. The appointment of the external auditor to verify and check the accuracy of financial statements in the deep waydepth, this will determine whether en the statements are ready for signing check that either they are signed by the Executive or directors or not.
The Directors check that the auditor’s i.e. internal and external auditors have performed their duties in the best possible way. They also check that every information given in statement is correct and complete because wrong information can lead towards wrong decision making about certain goals and objectives, then after surety of these statements, they sign the financial statements.
Sometimes the decision making about several things about the organisation i.e. like the achievement of goals, required targets and budgets going forward is highly dependent on the accuracy of financial statements.
In this way, overall burden is on the board of directors who signs the statements as they have already ensured that everything and every information is perfect and there does not require any type of correction. Mostly the documentation which is presented and required to ensure its significance includes the profit and loss statement, balance sheet, cash flow statement, accounting policies, auditor’s report and notes to the financial statement.
These statements d-are necessary to make sure that every information is perfect before it is signed by the directors.