Final answer:
The primary responsibility for sound accounting and fair financial reporting rests with the company's board of directors, supported by auditing firms and investors. These entities form the core of corporate governance, ensuring accurate financial information.
Step-by-step explanation:
The responsibility for implementing sound accounting practices and principles, maintaining an adequate internal control structure, and making fair representations in the financial statements rests primarily with the board of directors. The board, which is elected by the shareholders, serves as the first line of corporate governance and has oversight over top executives. They are supported by other institutions such as auditing firms and outside investors, including large shareholders such as mutual funds or pension funds. However, in an event like that of Lehman Brothers, it was clear that these mechanisms of corporate governance can fail, highlighting the critical importance of the role the board plays in maintaining the fidelity of financial information.