Financial information for both public and private firms is equally reliable because their statements are audited by outside accounting firms to ensure that are developed in a manner consistent with GAAP.

Question

Quizplus · Accepted Answer

Financial information for public firms is required to be audited by outside accounting firms, but private firms are not necessarily required to have their financial statements audited. Therefore, the statement is false. Additionally, reliable financial information depends on multiple factors, such as the quality of management and the integrity of the accounting practices, not just whether or not the statements are audited.

Financial Information for Both Public and Private Firms Is Equally