What problem arises for comparing Exxon Mobil Corporation (United States)and BP PLC (United Kingdom)financial statements?
A)Different accounting standards between the two countries
B)Different reporting currencies between the two countries
C)Different tax rates between the two countries
D)Exxon Mobil Corporation and BP PLC are each listed on the stock exchange in their respective country

Question

Quizplus · Accepted Answer

The major problem that arises when comparing the financial statements of Exxon Mobil Corporation (United States) and BP PLC (United Kingdom) is that the two companies differ in their accounting standards. The United States follows the Generally Accepted Accounting Principles (GAAP) while the United Kingdom follows the International Financial Reporting Standards (IFRS). As a result, the two companies may use different methods to record their financial transactions, which could affect the comparability of their financial statements.

What Problem Arises for Comparing Exxon Mobil Corporation (United States)and