ACCA Advanced Audit and Assurance (AAA) Practice Exam

What does stewardship refer to in a business context?

1. Managing personal investments

2. Oversight of company employees

3. Responsibilities of managing another's property

4. Establishing company policies

The correct answer is: Responsibilities of managing another's property

In a business context, stewardship primarily refers to the responsibilities of managing another's property or resources on their behalf. This concept is rooted in the idea that managers or leaders are entrusted with the care and oversight of assets that do not belong to them but rather to stakeholders such as shareholders or the community. Effective stewardship encompasses the ethical management of resources, ensuring they are used wisely and effectively to achieve organizational goals while considering the interests of those who have a stake in the business. This involves accountability, transparency, and decision-making that reflect the values of the organization and the expectations of stakeholders. While options like managing personal investments, overseeing company employees, and establishing company policies are important aspects of business management, they do not capture the essence of stewardship as it specifically relates to the fiduciary duty of care for someone else's property or interests. Stewardship transcends these functions by emphasizing the accountability and responsible management of resources that are entrusted to an individual or organization.