Which of the following statements concerning financial reporting is TRUE?

Question

Quizplus · Accepted Answer

One of the fundamental characteristics of useful financial information is that it should fully depict the economic substance of business activities. This means that the information presented in financial statements should accurately reflect the underlying transactions and events that occurred in the business. This principle is important for ensuring that financial information is relevant, reliable, and comparable. The other answer choices are incorrect. The FASB does not require financial decision makers to adhere to a code of professional conduct, but rather develops accounting standards for financial reporting. The Sarbanes-Oxley Act does require businesses to maintain an audited system of internal control. There is also an ongoing effort to eliminate differences in accounting rules between countries through the convergence of international accounting standards.

Which of the Following Statements Concerning Financial Reporting Is TRUE