Enhancing Reporting Quality in Financial Statements

Medium Financial Reporting Standards Reporting Quality

In the context of financial reporting, companies are required to present financial statements that provide information useful to investors and other stakeholders in making economic decisions. Reporting quality is essential as it ensures transparency, comparability, and reliability of the financial statements. Different firms may adopt varying practices that can affect the perceived quality of their reports.

Which of the following practices is most likely to enhance the reporting quality of a company's financial statements?

Aggressively deferring expenses in order to inflate current period earnings.

Regularly conducting internal audits and adhering to established accounting standards.

Utilizing non-GAAP measures to present a more favorable view of financial performance.

Hint

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