Among the reasons why users demand an audit of financial statements, what is the problem of competing incentives?
A)The company has a reason to disclose information in a way that presents it in favorable light.
B)Financial statement users lack accounting and legal knowledge to understand accounting and disclosure choices.
C)Financial statement users to not have access to the company under review and thus face difficulty in determining whether the statements are fair.
D)Financial statement users need reliable information in order to make decisions that have real consequences.

Question

Quizplus · Accepted Answer

Competing incentives refer to situations where the company may have a reason to present information in a way that is favorable to them, even if it is not entirely accurate or complete. This can result in financial statements that are not trustworthy or reliable, which is why users demand an audit.

Among the Reasons Why Users Demand an Audit of Financial