When a country establishes financial reporting rules that closely resemble tax reporting rules,reported accounting profits tend to be:
A)Negative.
B)Higher.
C)Lower.
D)Misreported.

Question

Quizplus · Accepted Answer

When financial reporting rules closely resemble tax reporting rules, companies may be incentivized to minimize their reported profits in order to reduce their tax liabilities. This can result in reported accounting profits being lower than they would be under a different reporting regime.

When a Country Establishes Financial Reporting Rules That Closely Resemble