Users of financial statements should be interested in information about compliance with laws and regulations for which of the following reasons?

Question

Quizplus · Accepted Answer

Compliance with laws and regulations is important for all of the reasons listed. Bond covenants may require certain actions or restrictions on the entity, and noncompliance could result in default on the bonds. Taxing limitations may also have consequences for noncompliance, such as penalties or loss of tax-exempt status. Donor restrictions must be followed in order to maintain the trust of the donors and the legality of the entity's operations.

Users of Financial Statements Should Be Interested in Information About