In interpreting common-size financial statements denominated in a foreign currency,a word of caution is
A)There may be differences in the accounting principles the companies use for reporting.
B)There may be differences in the culture of the company's stakeholders.
C)There may be differences in the time period covered in the statements.
D)None of these ans choices are correct.

Question

Quizplus · Accepted Answer

Differences in accounting principles can affect the comparability of financial statements denominated in a foreign currency. For example, one company may use International Financial Reporting Standards (IFRS) while another may use Generally Accepted Accounting Principles (GAAP), resulting in different presentation formats and interpretations of financial data.

In Interpreting Common-Size Financial Statements Denominated in a Foreign Currency,a