The Third Party Who Checks Annual Financial Statements to Ensure

question 62

Multiple Choice

The third party who checks annual financial statements to ensure that they are prepared according to International Financial Reporting Standards (IFRS) or Generally Accepted Accounting Principles (GAAP) and verifies that the information reported is reliable is the:

• A)The government
• B)International Accounting Standards Board (IASB)
• C)Securities and Exchange Commission (SEC).
• D)auditor.

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Definitions:

Fair Value

A measure of the estimated price at which an asset could be bought or sold or a liability settled, under current market conditions.

Passive Investments

Investments in which the investor does not actively manage or influence the operation of the asset, such as stocks or mutual funds.

Equity Securities

Financial instruments representing ownership interest in a company, such as stocks, which can yield dividends and capital gains.

Goodwill

An accounting value assigned to the reputation, customer loyalty, or other factors enabling a business to earn higher profits than expected from its assets alone.