To improve the quality and reliability of the information reported in the financial statements: I. Accounting standards should keep pace with the dynamic business environment II. There should be a body of internal auditors to oversee the functioning of external auditors III. Reports should be certified by key company officials IV. Accounting standards should be set by a body comprising of practicing accountants only and this body should be funded from a corpus built up from the contributions made by the companies
Explanation:
Statement II is incorrect as paragraph 12 states explicitly that an independent body should oversee the functioning of auditors. Statement IV is completely out of context and is incorrect. Statement I is correct as paragraph 11 states that accounting standards should keep pace with the dynamic business environment. Statement III is correct as stated in paragraph 13. The CEO and CFO should certify annual and quarterly reports. Hence the correct answer is option 3.
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