If the financial reporting environment were unregulated,disclosure would occur voluntarily
A)as long as other companies in the reporting company's industry voluntarily disclosed financial information.
B)only to analysts that the company believes will report favorably on the company's prospects.
C)only when managers wanted to raise additional capital.
D)as long as the incremental benefits to the company from supplying financial information exceeded the incremental costs of providing the information.

Question

Quizplus · Accepted Answer

In an unregulated financial reporting environment, companies would likely disclose financial information only if the benefits of doing so (such as attracting investors or improving public perception) outweigh the costs (such as the time and resources required to prepare and audit financial statements). This cost-benefit analysis would vary for each company, and would depend on factors such as the size of the company, its growth prospects, and the competitive landscape in its industry. Therefore, choice D is the best answer.

If the Financial Reporting Environment Were Unregulated,disclosure Would Occur Voluntarily