Companies needing to access new and ever larger sources of capital in response to increased international competitiveness face a severe disadvantage if their financial reporting
A)is in accordance with IFRS.
B)is in accordance with U.S.GAAP.
C)is based on a commercial and tax law approach.
D)is based on an economic performance approach.

Question

Quizplus · Accepted Answer

Companies that base their financial reporting on a commercial and tax law approach may face a severe disadvantage in accessing new and larger sources of capital. This is because such an approach might not provide the transparency, comparability, and consistency that investors look for, unlike financial reporting based on IFRS or U.S. GAAP, which are designed to meet international investors' needs.

Companies Needing to Access New and Ever Larger Sources of Capital