This article was first published in the January 2018 UK edition of Accounting and Business magazine.

Much of the recent news on financial reporting has dwelt on why auditors did not spot this, that or the other problem ahead of a corporate crisis, such as the failure of the UK bank HBOS in October 2008.

So it was refreshing to read the report Directors Responsibilities for Financial Reporting, by ACCA and its strategic partner Chartered Accountants Australia and New Zealand. It is a timely reminder that a company’s management prepares the financial statements and that questioning of its judgments starts with the directors. Indeed, they need to exhibit professional scepticism just as much as the auditors do.

Directors’ duties include overseeing and questioning both internal and external audit. Tendering requirements for the latter mean that audit committees have been honing their skills in setting criteria for high-quality audit and in evaluating the hired firm’s performance.

Another important reminder, however, is that directors do not need to be accounting experts (although the audit committee may be required to have one of these). This may help them avoid getting bogged down in technical detail when the essential task is to focus on the substance of the company’s transactions and financial state. Their key audience is an external one: those who provide the company with funding and who make economic decisions on the assumption that the numbers are reliable.

This ‘back to basics’ approach, which, as the report points out, is adopted in many parts of the world, is welcome amid the clamour for directors to pay attention to a wide range of other factors. Over the past decade, the emphasis of corporate governance regulation has shifted away from promoting wealth creation in efficient capital markets and towards pursuing the ‘public interest’.

The practical impact of this is that one rarely hears the concern these days that regulation might stifle entrepreneurship, or distract the board from creating wealth for shareholders. It is assumed that a company can always do well by doing good.

Often it can, but take just one recent example of the potential contradiction in this view: Royal Bank of Scotland’s decision to close a quarter of its branches. This will help RBS return to profitability after a decade of losses and enable the government to sell the taxpayers’ 71% stake at less of a loss than we currently face. But it will also deprive some communities and non-internet users of important - effectively public - facilities.

Where does the public interest lie? Directors’ duties are now more orientated towards policing on behalf of the public. But they should quietly remind themselves that a sine qua non for corporate success is true and fair financial information.

Jane Fuller is a fellow of CFA UK and serves on the Audit and Assurance Council of the Financial Reporting Council