Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What action can result from failing to file financial statements?

1. A tax refund

2. Disciplinary action from the national Companies Register

3. Increased consumer trust

4. A reduction in tax liabilities

The correct answer is: Disciplinary action from the national Companies Register

Failing to file financial statements can lead to disciplinary action from the national Companies Register because such filings are a legal requirement for corporate entities. The purpose of these regulations is to ensure transparency and accountability in how companies report their financial performance and position. When companies do not comply with this requirement, they may face penalties such as fines, the suspension of business operations, or even legal action, as it undermines the integrity of financial reporting. This response from the regulatory body seeks to maintain trust in the corporate framework and protect stakeholders, including shareholders, creditors, and the public. Other options do not align with the consequences of non-compliance with financial statement regulations. For instance, failure to submit required financial statements is unlikely to yield a tax refund or lead to reduced tax liabilities, as these typically rely on accurate reporting of financials. Additionally, not filing can diminish, rather than enhance, consumer trust, as stakeholders may view the lack of transparency unfavorably.