Restmount Kenya Ltd. was formed on 1 October 1997 in order to export tea and coffee to European markets. The Directors are unsure as to their responsibilities and the nature of their relationship with the external auditors. The audit partner has asked you to visit the client and explain to the directors, the fundamental aspects of the accountability of the directors and their relationship with the auditor. Required: Explain to the directors of Restmount Kenya Ltd: – Directors‘ responsibilities in relation to the accounting function of the Company

The responsibilities of the directors in relation to the accounting function of the company are as follows:-

1. To safeguard the company‘s assets and to prevent fraud and errors in the company.
2. To ensure that the company keeps proper accounting records.
3. To prepare annual financial statements to show the results of the company for the year and the state of affairs of the company at the balance sheet date. (Must show a true and fair view).
4. To deliver to the registrar of companies a copy of the company‘s audited
financial statements within seven months of the end of the accounting year.
5. To set up an ICS in the company to ensure that all the above are carried out