ACCA Financial Reporting (FR) Exam 2025 –
Complete Study Guide, Notes & Practice
Questions
Prepare for the ACCA Financial Reporting (FR) Exam 2025 with our updated study materials.
Access IFRS summaries, examiner-style questions, mock exams, and expert guidance to
strengthen your financial reporting, interpretation, and analysis skills for exam success.
financial reporting
the way companies show their financial performance to investors, creditors, and other
interested parties by preparing and presenting financial statements
financial statement analysis
to use the information in a company's financial statements, along with other relevant
information, to make economic decisions
Accounting policies, methods, and estimates used in preparing financial statements are most
likely to be found in the:
A auditor's report.
B management commentary
C notes to the financial statements
C. The notes disclose choices in accounting policies, methods, and estimates.
Information about management and director compensation are least likely to be found in the:
A auditor's report
B proxy statement.
C notes to the financial statements
A is correct. Information about management and director compensation is not found in the
auditors report. Disclosure of managment compensation is required the proxy statement, and
,some aspects of management compensation are disclosed in the notes to the financial
statements.
Information about a company's objectives, strategies, and significant risks are most likely to be
found in the:
A auditor's report
B management commentary
C notes to the financial statements
B is correct. These are components of management commentary.
What type of audit opinion is preferred when analyzing financial statements?
A Qualified
B Adverse
C Unqualified.
Cis correct. An unqualified opinion is a "clean" opinion and indicates that the financial
statements present the company's performance and financial position fairly in accordance with
a specified set of accounting standards.
An auditor determines that a company's financial standards are prepared in accordance with
applicable accounting standards except with respect to inventory reporting. This exception is
most likely to result in an audit opinion that is:
A adverse
B qualified
C unqualified
Bis correct. A qualified audit opinion is one in which there is some scope limitation or
exception to accounting standards. Exceptions are described in the audit report with additional
explanatory paragraphs so that the analyst can determine the importance of exception.
An independent audit report is most likely to provide:
A absolute assurance about the accuracy of the financial statements.
B reasonable assurance that the financial statements are fairly presented.
C a qualified opinion with respect to the transparency of the financial statements.
,B. The independent audit report provides reasonable assurance that the financial statements
are fairly presented, meaning that there is a high probability that the audited financial
statements free from material error, fraud, or illegal acts that have a direct effect on the
financial statements.
Providing information about the performance of a company, its financial position, and changes
in financial position that is useful to a wide range of users is most accurately described as the
role of:
A financial reporting
B the audit report
C financial statement analysis.
A is correct. The role of financial reporting is to PROVIDE information about the performance
of a company its financial position, and changes in financial position that is useful to a wide
range of users in making economic decisions.
Fnancial statement analysis is to take the financial reports and ANALISE EVALUATE the past
current and prospective performance and financial position of a company for the purpose of
making investment, credit, and other economic decisions.
Interim financial reports released by a company are most likely to be:
A monthly
B unaudited.
C unqualified.
Bis correct. Interim reports are typically provided semiannually or quarterlly and present four
basic financial statements and condensed notes. They are not audited. Unqualified is a type of
audit opinion.
Q. Which of the following sources of information used by analysts is found outside a
company's annual report?
A Auditor's report
B Peer company analysis
C Management's discussion and analysis
B. When performing financial statement analysis, analysts should review all company sources
of information as well information from external sources regarding the economy, the industry,
the company, and peer (comparable).
, Interim reports most likely:
A are audited
B are issued semi-annually or quarterly.
C include a full set of financial statements and notes.
Bis correct. Interim reports are provided semi-annually or quarterly, depending applicable
regulatory requirements. are not audited. generally present the four basic financial statements
and condensed notes.
Ratios are an input into which step in the financial statement analysis framework?
A Process data,
B Collect input data.
C Analyze/interpret the processed data
Cis correct. Ratios are an output of the process data step but are an input into the
analyze/interpret data step.
Which phase in the financial statement analysis framework is most likely to involve producing
updated reports and recommendations?
A Follow-up
B Analyze/interpret the processed data
C. Develop and communicate conclusions and recommendations
A is correct. The follow-up phase involves gathering necessary information and repeating the
analysis to determine whether it is necessary to update reports and recommendations.
Inherent risks in an investment are most appropriately evaluated in which step of the financial
statement analysis framework?
A Develop and communicate conclusions/recommendations
B Articulate the purpose and context of analysis
C Process data
A is correct. Discussion and presentation of inherent risks in an investment is appropriate in
the develop and communicate conclusions/recommendations step.
Complete Study Guide, Notes & Practice
Questions
Prepare for the ACCA Financial Reporting (FR) Exam 2025 with our updated study materials.
Access IFRS summaries, examiner-style questions, mock exams, and expert guidance to
strengthen your financial reporting, interpretation, and analysis skills for exam success.
financial reporting
the way companies show their financial performance to investors, creditors, and other
interested parties by preparing and presenting financial statements
financial statement analysis
to use the information in a company's financial statements, along with other relevant
information, to make economic decisions
Accounting policies, methods, and estimates used in preparing financial statements are most
likely to be found in the:
A auditor's report.
B management commentary
C notes to the financial statements
C. The notes disclose choices in accounting policies, methods, and estimates.
Information about management and director compensation are least likely to be found in the:
A auditor's report
B proxy statement.
C notes to the financial statements
A is correct. Information about management and director compensation is not found in the
auditors report. Disclosure of managment compensation is required the proxy statement, and
,some aspects of management compensation are disclosed in the notes to the financial
statements.
Information about a company's objectives, strategies, and significant risks are most likely to be
found in the:
A auditor's report
B management commentary
C notes to the financial statements
B is correct. These are components of management commentary.
What type of audit opinion is preferred when analyzing financial statements?
A Qualified
B Adverse
C Unqualified.
Cis correct. An unqualified opinion is a "clean" opinion and indicates that the financial
statements present the company's performance and financial position fairly in accordance with
a specified set of accounting standards.
An auditor determines that a company's financial standards are prepared in accordance with
applicable accounting standards except with respect to inventory reporting. This exception is
most likely to result in an audit opinion that is:
A adverse
B qualified
C unqualified
Bis correct. A qualified audit opinion is one in which there is some scope limitation or
exception to accounting standards. Exceptions are described in the audit report with additional
explanatory paragraphs so that the analyst can determine the importance of exception.
An independent audit report is most likely to provide:
A absolute assurance about the accuracy of the financial statements.
B reasonable assurance that the financial statements are fairly presented.
C a qualified opinion with respect to the transparency of the financial statements.
,B. The independent audit report provides reasonable assurance that the financial statements
are fairly presented, meaning that there is a high probability that the audited financial
statements free from material error, fraud, or illegal acts that have a direct effect on the
financial statements.
Providing information about the performance of a company, its financial position, and changes
in financial position that is useful to a wide range of users is most accurately described as the
role of:
A financial reporting
B the audit report
C financial statement analysis.
A is correct. The role of financial reporting is to PROVIDE information about the performance
of a company its financial position, and changes in financial position that is useful to a wide
range of users in making economic decisions.
Fnancial statement analysis is to take the financial reports and ANALISE EVALUATE the past
current and prospective performance and financial position of a company for the purpose of
making investment, credit, and other economic decisions.
Interim financial reports released by a company are most likely to be:
A monthly
B unaudited.
C unqualified.
Bis correct. Interim reports are typically provided semiannually or quarterlly and present four
basic financial statements and condensed notes. They are not audited. Unqualified is a type of
audit opinion.
Q. Which of the following sources of information used by analysts is found outside a
company's annual report?
A Auditor's report
B Peer company analysis
C Management's discussion and analysis
B. When performing financial statement analysis, analysts should review all company sources
of information as well information from external sources regarding the economy, the industry,
the company, and peer (comparable).
, Interim reports most likely:
A are audited
B are issued semi-annually or quarterly.
C include a full set of financial statements and notes.
Bis correct. Interim reports are provided semi-annually or quarterly, depending applicable
regulatory requirements. are not audited. generally present the four basic financial statements
and condensed notes.
Ratios are an input into which step in the financial statement analysis framework?
A Process data,
B Collect input data.
C Analyze/interpret the processed data
Cis correct. Ratios are an output of the process data step but are an input into the
analyze/interpret data step.
Which phase in the financial statement analysis framework is most likely to involve producing
updated reports and recommendations?
A Follow-up
B Analyze/interpret the processed data
C. Develop and communicate conclusions and recommendations
A is correct. The follow-up phase involves gathering necessary information and repeating the
analysis to determine whether it is necessary to update reports and recommendations.
Inherent risks in an investment are most appropriately evaluated in which step of the financial
statement analysis framework?
A Develop and communicate conclusions/recommendations
B Articulate the purpose and context of analysis
C Process data
A is correct. Discussion and presentation of inherent risks in an investment is appropriate in
the develop and communicate conclusions/recommendations step.
