Which of the Following Statements About Pro Forma Financial Statements

question 53

Multiple Choice

Which of the following statements about pro forma financial statements is incorrect?

• A) Pro form financial statements are projections for future periods based on forecasts.
• B) Pro forma financial statements are typically completed for two to three years in the future.
• C) Pro forma financial statements are required by the SEC.
• D) Most companies consider their pro forma financial statements to be confidential and reveal them to outsiders only on a "need to know basis."
• E) Pro forma financial statements are strictly planning tools.

---

Definitions:

Control Measures

Actions, mechanisms or policies implemented to regulate processes and diminish risks.

Sarbanes-Oxley Act

A United States federal law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures.

Internal Controls

Procedures and policies implemented by a company to safeguard its assets, ensure accurate and reliable financial reporting, and promote compliance with laws and regulations.

Auditors

Professionals who examine and verify a company's financial statements and records for accuracy and compliance with laws and regulations.