Which of the following sets of entities are not likely to meet the definition of a reporting entity?
A) Small proprietary companies, large proprietary companies and partnerships
B) Small proprietary companies and sole traders
C) Large proprietary companies, sole traders and partnerships
D) Small proprietary companies and large professional accounting practices

Question

Quizplus · Accepted Answer

Small proprietary companies and sole traders are less likely to meet the definition of a reporting entity because they often do not have external users who rely on their financial statements to make economic decisions. Large proprietary companies, partnerships, and large professional accounting practices typically have broader external user bases, making them more likely to meet the reporting entity criteria.

Which of the Following Sets of Entities Are Not Likely