- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 1. Introduction to Financial Statement Analysis
- Subject 3. Regulated Sources of Information
CFA Practice Question
Companies have their financial statements audited by an independent certified public accountant because ______
II. they sell shares of stock to the public.
III. it is a requirement to apply for sizeable loans.
I. financial statements could be falsified by preparers for personal gain.
II. they sell shares of stock to the public.
III. it is a requirement to apply for sizeable loans.
Correct Answer: I, II and III
Although companies do have their financial statements audited because preparers could falsify them for their own personal gain, they also have them audited because they sell stock to the public, as required by the SEC, and as a requirement to apply for sizeable loans.
User Contributed Comments 1
| User | Comment |
|---|---|
| Antoinepo | (I) seems to prevail , even more in the new IFRS where financial information quality is very important |