Investors who use accounting information to guide trading in foreign securities
A)should carefully compare expenses, but not revenues to companies in the same industry in the United States.
B)must adjust the numbers of foreign-based companies' financial statements and thoroughly understand the foreign environment.
C)must contact the foreign CEO before any investment in stock occurs.
D)should contact the foreign company's auditors to find out how much dividends will be paid.

Question

Quizplus · Accepted Answer

Investors who use accounting information to guide trading in foreign securities must adjust the numbers of foreign-based companies' financial statements and thoroughly understand the foreign environment. This is because accounting standards and practices may differ between countries, and economic, political and cultural factors can also affect the financial performance of foreign companies. Therefore, investors should analyze the financial statements of foreign companies carefully and consult with experts in the field before making investment decisions. Choices A, C, and D are not relevant or practical for investors who use accounting information to guide trading in foreign securities.

Investors Who Use Accounting Information to Guide Trading in Foreign