Revenue may be inflated by booking as revenue products shipped to resellers without adequately adjusting for probable returns.
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Private firms are likely to understate revenue and understate costs in order to minimize their tax liabilities.
For privately held firms, firm specific risk may include lack of product, industry, and geographic diversification; limited management depth, volatile stock markets, and unionized workforces.
Financial information for both public and private firms is equally reliable because their statements are audited by outside accounting firms to ensure that are developed in a manner consistent with GAAP.
Both public and private firms always attempt to maximize earnings growth.