ACCA Corporate and Business Law (F4) Certification Practice Exam 2025 – Your All-in-One Guide to Success!

Public companies are generally subject to stricter regulations and oversight, which requires them to maintain higher levels of transparency and accountability. This is largely due to the fact that public companies have shares that are traded on stock exchanges, making them accountable to a broader group of stakeholders including shareholders, regulators, and the public at large.

Regulatory bodies, such as the Securities and Exchange Commission (SEC) in the United States or similar organizations in other jurisdictions, impose strict reporting requirements that include regular financial disclosures, adherence to specific corporate governance codes, and the establishment of independent audit committees. These regulations are designed to protect investors and ensure that the management of the company acts in the best interests of the shareholders.

In contrast, private companies, small businesses, and family-owned enterprises often face less stringent regulatory requirements. They may have fewer obligations to disclose financial information or governance practices, which can result in lower transparency and accountability. Thus, it is the nature of public companies, with their regulatory oversight and stakeholder demands, that necessitates their higher standards in these areas.