ABSTRACT
For many years, limited liability companies have been owned and managed by two different groups of people. The owners are the shareholders and the managers are the directors. Because of this separation it became necessary for information to be produced by the management as a report to the owners. This report is needed to demonstrate how well the management have looked after the investment of the owners; this is usually referred to as their ‘stewardship’ role. The report produced is what we now refer to as the ‘annual report and accounts’ or ‘financial statements’. This has now been the case for hundreds of years, and the need for accurate and honest reporting was highlighted as early as the eighteenth century by the first great financial scandal – ‘The South Sea Bubble’.
