Section reference

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Neeraj (Querist)
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11 September 2012 Under Which section it has been mentioned that "Preparation Of Financial Statements is the responsibility of management"?
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CS Pawan Kumar Baid

CS Pawan Kumar Baid (Expert)
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11 September 2012 Sec 217(2AA) of Companies Act, declares it to be Director's responsibility

"[(2AA) The Board's report shall also include a Directors' Responsibility Statement, indicating therein, -
(i) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with
proper explanation relating to material departures ;
(ii) that the directors had selected such accounting policies and applied them consistently and made judgments and
estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at
the end of the financial year and of the profit or loss of the company for that period ;
(iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and
detecting fraud and other irregularities ;
(iv) that the directors had prepared the annual accounts on a going concern basis."]

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