Consolidated Financial Statements Should Be Prepared Only When a Subsidiary

question 164

True/False

Consolidated financial statements should be prepared only when a subsidiary company has a controlling interest in the parent company.

---

Definitions:

Sarbanes-Oxley Act

U.S. federal law enacted to protect investors from fraudulent accounting activities by corporations. It mandates strict reforms to enhance financial disclosures and prevent accounting fraud.

Securities Fraud

A type of serious white-collar crime that can involve deceiving investors or manipulating financial markets.

Imprisoned

The state of being confined in a prison as a form of punishment for committing a crime or in detention while awaiting trial.

Exclusionary Rule

A legal principle in the United States that prohibits the use of evidence collected or analyzed in violation of the defendant's constitutional rights.