Which of the following statements about types of accounting is NOT true?

• A. Tax accounting deals exclusively with the preparation of financial statements for shareholders.
• B. Managerial accounting is primarily concerned with preparing reports for internal management decision-making.
• C. Auditing involves the independent examination of financial statements to ensure accuracy and compliance.
• D. Financial accounting focuses on providing information to external users such as investors and creditors.

Answer: (A)

Verified step by step guidance

1. Step 1: Begin by understanding the different types of accounting mentioned in the problem: Tax accounting, Managerial accounting, Auditing, and Financial accounting. Each type serves a specific purpose and audience.
2. Step 2: Review the definition of Tax accounting. Tax accounting primarily focuses on compliance with tax laws and regulations, including the preparation of tax returns and planning strategies. It does not deal exclusively with preparing financial statements for shareholders.
3. Step 3: Examine Managerial accounting. Managerial accounting is concerned with providing internal reports and data to assist management in decision-making, such as budgeting, forecasting, and performance evaluation.
4. Step 4: Consider Auditing. Auditing involves the independent examination of financial statements to ensure their accuracy, reliability, and compliance with accounting standards and regulations.
5. Step 5: Analyze Financial accounting. Financial accounting focuses on preparing financial statements that provide information to external users, such as investors, creditors, and regulatory agencies, to make informed decisions.