The contents of the section of the annual report entitled "Management's Discussion and Analysis" (MD&A) are
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A. B. C. D. E.Explanation
The contents of the MD&A section are mandated by the SEC and not FASB.
The correct answer is E. none of these answers.
"Management's Discussion and Analysis" (MD&A) is a section of the annual report that provides a narrative explanation and analysis of a company's financial statements and overall financial condition. It is not mandated by regulations of the SEC (U.S. Securities and Exchange Commission), pronouncements of the FASB (Financial Accounting Standards Board), regulations of the Internal Revenue Service, or reviewed by independent auditors.
While the SEC requires certain information to be included in the annual report, including financial statements and footnotes, the MD&A section is not specifically mandated by SEC regulations. However, the SEC does encourage companies to provide MD&A as it enhances the understanding of financial statements and provides insight into the company's performance and future prospects.
The FASB is responsible for establishing accounting standards in the United States, but they do not mandate the inclusion of the MD&A section in the annual report. The FASB's pronouncements primarily focus on the proper accounting treatment and disclosure of financial transactions and events.
The independent auditors review the financial statements and express an opinion on their fairness and compliance with accounting standards. However, they do not typically review or provide assurance on the MD&A section, as it is a management's responsibility to provide the analysis and explanation of the financial results.
The Internal Revenue Service (IRS) is the U.S. government agency responsible for tax collection and enforcement. The IRS does not mandate the inclusion of the MD&A section in the annual report.
In summary, the MD&A section of the annual report is not mandated by any specific regulations or pronouncements but is included voluntarily by management to provide additional insights and analysis to the financial statements and overall financial condition of the company.