A survey of directors, auditors and other financial professionals conducted by the Financial Reporting Council revealed that, on average, directors believe their knowledge of the more technical accounting issues was “fair”. Test your knowledge: Financial reporting quiz for directors
While the survey acknowledged a large diversity between directors of ASX top 200 companies versus other listed, non-listed, not-for-profits, and superannuation trustees, almost all survey respondents acknowledged concerns about directors’ knowledge of financial reporting.
In response to concerns, the Australian Securities and Investments Commission (ASIC) has developed a confidential quiz to test the financial reporting knowledge of a wide variety and sample of Australian company directors.
It was developed in conjunction with the Australian Institute of Company Directors, CPA Australia, The Chartered Accountants Australia and New Zealand and the Institute of Public Accountants.
The quiz consists of 10 multiple choice questions, and seeks:
- to provide a self awareness of general competence relating to financial reporting requirements
- to provide education in respect of each specific question
- to provide links to additional resources and/or training to maintain or improve competence.
The quiz focuses on the more technical elements of financial reporting rather than broader financial knowledge. For example, the quiz doesn’t test understanding of matters such as financial products or instruments, assessments for capital and funding decisions, financial processes and controls, or how decisions can affect the future financial health of a company.
Completion of the quiz is confidential, and no names or email addresses of participants are recorded. As well, IP addresses of respondents are hidden and not made available to ASIC.
Completion of the demographic data in the questionnaire is optional, but ASIC says this data will enable it to refine further questionnaires and also aid the shaping of its educational offerings in the future.