Which of the following is considered to be mandatory information required by a regulatory body?

• A. Press releases about new product launches
• B. Management's internal budget forecasts
• C. Voluntary sustainability reports
• D. Financial statements prepared in accordance with GAAP

Answer: (D)

Verified step by step guidance

1. Understand the concept of mandatory information: Mandatory information refers to data or reports that organizations are legally required to provide to regulatory bodies, often to ensure transparency and compliance with laws and regulations.
2. Identify the role of GAAP (Generally Accepted Accounting Principles): GAAP is a set of accounting standards that companies must follow when preparing financial statements. These principles ensure consistency, reliability, and comparability of financial information.
3. Analyze the options provided: Press releases, management's internal budget forecasts, and voluntary sustainability reports are not mandatory information required by regulatory bodies. These are either voluntary or internal documents.
4. Recognize the importance of financial statements: Financial statements prepared in accordance with GAAP are mandatory because they provide a standardized and regulated way to report a company's financial performance and position to stakeholders, including regulatory bodies.
5. Conclude that financial statements prepared in accordance with GAAP are the correct answer, as they fulfill the requirement for mandatory information demanded by regulatory bodies.