Which of the Following Statements Is False

question 112

Multiple Choice

Which of the following statements is false?

• A)The board of directors meets with the external auditors to discuss management's compliance with their financial reporting obligations.
• B)The external auditors are selected by the Securities & Exchange Commission (SEC).
• C)The Securities & Exchange Commission (SEC) requires publically traded companies to have their financial statements audited by an independent accountant.
• D)The external auditors assume some responsibility with respect to the fairness of the financial statements.

---

Definitions:

Normal Balance

The side (debit or credit) of an account that is usual or expected to increase the balance of that account.

Liability

Financial obligations or debts that a company owes to others, which must be settled through the transfer of assets or provision of services.

Asset

An economic resource that can be owned or controlled to produce value and that is held by a company to produce positive economic value.

Equity

The worth of an owner's stake in a property or business once all debts and other financial obligations have been subtracted.