Financial statements can mislead a potential buyer trying to develop an accurate business valuation.

Question

Quizplus · Accepted Answer

Financial statements can be manipulated or skewed in various ways, such as through creative accounting practices or hidden liabilities, which can result in a misrepresentation of the true financial health of the business. Therefore, a potential buyer should conduct a thorough due diligence process to obtain a more accurate business valuation.

Financial Statements Can Mislead a Potential Buyer Trying to Develop