Question

Which one is a voluntary disclosure that released by a firm?

Pro forma earnings announcement

MD&A

Material accounting policies that firm uses

Auditor's report

Answer 1

Option (a) is correct

Proforma earnings announcement is a voluntary disclosure that is released by a firm. Proforma earnings are nor prepared or do not follow the generally accepted accounting principles (GAAP) and are unaudited. Company uses its own discretion in preparing the proforma earnings statement. It decides the items to be included in the proforma earnings statement.

Option (b) is incorrect: MD&A (Management discussion and analysis) is presented as a part of annual report or quarterly filing. It is required by law to be filed.

Option (c) & (d) are incorrect: Material accounting policies that firm uses and Auditor's report are required to be filed mandatorily by every company.