Information asymmetry should be reduced to make the capital

Information asymmetry should be reduced to make the capital market be more efficient. However, accounting professionals are not supposed to be involved to affect the level of information asymmetry because they should be objective to prepare financial information.

True

False

Solution

The given statement is true .

Information asymmetry is information failure which occurs one party to an economic transaction possesses greater material knowledge than the other party. This can be reduced by making the information abundantly available and inexpensive such as through the internet.

However, accounting professionals are not concerned with this as their main objective is to prepare financial information.