Question

The provisions of some laws and regulations have a direct effect on the financial statements in determining the reported amounts and disclosures in the financial statements. Which of the following is least likely to have a direct effect on the financial statements of the entity identified?
A. A corporation’s compliance with the tax code.

B. A bank’s compliance with legal capital requirements.

C. A service firm’s compliance with pension laws.

D. A manufacturer’s compliance with the occupational and safety code.

Answer 1

Answer:

Option D is correct.

Explanation:

A manufacturer’s compliance with the occupational and safety code is least likely to have a direct effect on the financial statements of the entity identified.