In contrast to the financial statements of publicly held firms, private company financials often include personal expenses of the owner and excess compensation expenses.

Question

Quizplus · Accepted Answer

Private companies may choose to include personal expenses of the owner and excessive compensation expenses in their financial statements as there is typically less oversight and regulation compared to publicly held firms. However, this is not always the case and ultimately depends on the accounting practices and policies of the specific company.

In Contrast to the Financial Statements of Publicly Held Firms