FINANCIAL ACCOUNTING

Identify the option that is relevant to the potential cost of the public disclosure of accounting information.

Identify the option that is relevant to the potential cost of the public disclosure of accounting information.

Option &#x201C;d&#x201D;

Disclosure: Disclosure is the act of providing financial information to external users. Disclosing financial information would result the following potential costs: Financial disclosures also result in costs being imposed by competitors, apart from obvious cost. Disclosing too much information can place a company at a competitive disadvantage, If the expectations of the investors are not met, then it may bring litigation against the managers. From the above explanation it is clear that “option a, b and c” are incorrect options (partially correct) and only option “d” is a correct answer.

Disclosure: Disclosure is the act of providing financial information to external users.
Disclosing financial information would result the following potential costs:
<ul>
<li>Financial disclosures also result in costs being imposed by competitors, apart from obvious cost.</li>
<li>Disclosing too much information can place a company at a competitive disadvantage,</li>
<li>If the expectations of the investors are not met, then it may bring litigation against the managers.</li></ul>
From the above explanation it is clear that &#x201C;option a, b and c&#x201D; are incorrect options (partially correct) and only option &#x201C;d&#x201D; is a correct answer.

Identify the option that is relevant to the potential cost of the public disclosure of accounting information.

Answer

Explanation of Solution