Which group of financial statement users is likely to be least pleased with conservatively stated income statements?
A) Potential shareholders, seeking to buy stock cheaply
B) Current shareholders, seeking to sell their stock
C) Potential lenders, seeking to ensure the company can repay the loans
D) Workers, seeking to justify demands for higher pay

Question

Quizplus · Accepted Answer

Current shareholders, seeking to sell their stock, are likely to be least pleased with conservatively stated income statements because conservative reporting can result in lower reported profits, potentially leading to lower stock prices and reduced attractiveness of the stock to potential buyers.

Which Group of Financial Statement Users Is Likely to Be