Financial information of more than one entity, or component ________.
A)are known as parent-subsidiary statements
B)are not allowed under GAAP
C)are referred to as group financial statements
D)should be audited by the internal audit function instead

Question

Quizplus · Accepted Answer

When financial information of more than one entity or component is presented together, it is called group financial statements. This is allowed under GAAP and is often used to present the financial results and position of a group of companies under common control or ownership. Parent-subsidiary statements may be included within the group financial statements but refer to a specific relationship between a parent company and its subsidiaries. Internal audit functions may be involved in reviewing and verifying the financial information presented in group financial statements, but they would not typically be responsible for auditing them.

Financial Information of More Than One Entity, or Component ________