Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What role does the finance function play in an organization?

1. It develops marketing strategies

2. It is responsible for raising money and reporting to stakeholders

3. It only focuses on investment decisions

4. It manages human resources

The correct answer is: It is responsible for raising money and reporting to stakeholders

The finance function plays a crucial role in an organization by being responsible for raising money and reporting to stakeholders. This encompasses a variety of activities, including budgeting, forecasting, and financial reporting, which are essential for ensuring the organization has the necessary capital to operate and grow. By managing funds effectively, the finance function facilitates operational activities, strategic planning, and investments. Furthermore, reporting to stakeholders—such as investors, creditors, and regulatory bodies—is vital for maintaining transparency, building trust, and enabling informed decision-making regarding the organization’s financial health. The other choices do not accurately represent the scope of the finance function. Developing marketing strategies is typically the responsibility of the marketing department, while handling human resources is managed by HR professionals. Although investment decisions are a part of the finance function’s responsibilities, it is not limited to just that aspect; therefore, saying it "only focuses" on investment decisions overlooks its broader role in organizational finance management.