You wish to compare the performance of two companies. Which of the following statements is most likely to be incorrect?
A)If the companies operate in different industries, this will hinder comparability.
B)The use of different accounting methods will hinder comparability.
C)If the companies are of significantly different sizes, this will hinder comparability.
D)If companies have different auditors, this will hinder comparability.

Question

Quizplus · Accepted Answer

Different auditors do not inherently hinder comparability between companies, as auditors are required to adhere to the same auditing standards. The key factors affecting comparability are operational, financial, and accounting differences, not who performs the audit.

You Wish to Compare the Performance of Two Companies