If a CISO wants to understand the liabilities of the company, she will refer to the:

Question

Options

• AProfit and Loss statement
• BStatement of retained earnings
• CStatement of proxy
• DBalance sheet

• A
  12% (6)
• B
  4% (2)
• C
  10% (5)
• D
  75% (39)

Explanation

A balance sheet is the definitive source for understanding a company's liabilities because it presents a snapshot of assets, liabilities, and equity at a specific point in time - liabilities are literally listed as a distinct section. A CISO needs this to assess financial exposure, debt obligations, and risk posture tied to the company's financial position.

Why the distractors are wrong:

• A (Profit and Loss / Income Statement): Shows revenue and expenses over a period - it measures profitability, not what the company owes.
• B (Statement of Retained Earnings): Tracks changes in retained earnings over time - relevant to shareholders, not liability assessment.
• C (Statement of Proxy): Not a standard financial statement at all; a proxy statement relates to shareholder voting, not financial data.

Memory tip: Think of the balance sheet equation - Assets = Liabilities + Equity. The word "liabilities" is baked directly into the formula, making it the only statement where liabilities are explicitly categorized and totaled.

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