Which of the following statements about the annual report are true? (Select all that apply.)

Check All That Apply

• Annual reports of public companies include an assessment of the companys internal control procedures.

  Annual reports of public companies include an assessment of the companys internal control procedures.

• The companys auditor prepares the financial statements while its management prepares the other information and disclosures required in the annual report.

  The companys auditor prepares the financial statements while its management prepares the other information and disclosures required in the annual report.

• The managements discussion and analysis section of the annual report provides an unbiased perspective of a companys operations, liquidity, and capital resources.

  The managements discussion and analysis section of the annual report provides an unbiased perspective of a companys operations, liquidity, and capital resources.

• The proxy statement contains disclosures on compensation to directors and executives.

Which of the following statements about the balance sheet are true? (Select all that apply.)

Check All That Apply

• A classified balance sheet to provide useful information about liquidity and long-term solvency.

  A classified balance sheet to provide useful information about liquidity and long-term solvency.

• Liquidity refers to an assessment of whether a company will be able to pay all its liabilities.

  Liquidity refers to an assessment of whether a company will be able to pay all its liabilities.

• Although many valuable resources are not recorded as assets in the balance sheet, these resources are reflected in the companys book value.

  Although many valuable resources are not recorded as assets in the balance sheet, these resources are reflected in the companys book value.

• The less financial flexibility, the more risk there is that an enterprise will fail.