Which of the following statements about accounting frameworks is true?

The correct choice emphasizes that the accounting framework applicable to a company is determined by the jurisdiction(s) where it operates. This means that different countries may have different rules and standards for accounting practices, reflecting their legal, economic, and cultural environments. Companies must adhere to the specific standards that are recognized and enforced in their operational context, which can lead to variations in how financial statements are prepared and presented across different regions.

For example, a company operating in the United States typically follows the Generally Accepted Accounting Principles (GAAP), while a company in Europe is likely to use International Financial Reporting Standards (IFRS). This highlights the importance of jurisdiction in establishing the relevant accounting framework.

The incorrect options present misconceptions about accounting frameworks. It is not true that all companies must follow the same accounting framework, as different jurisdictions allow for varying standards. Furthermore, it is not only publicly traded companies that must adhere to jurisdictional accounting rules; private companies must also follow these regulations based on their location. Lastly, companies in the U.S. are required to follow GAAP and do not universally adhere to IFRS, clarifying that the latter is applicable primarily in jurisdictions outside the U.S.