Management is required by GAAP to reduce information risk, even if the costs outweigh the benefits.

Question

Quizplus · Accepted Answer

GAAP does not require management to reduce information risk to the point where the costs outweigh the benefits. GAAP focuses on the relevance and faithful representation of financial information, but it also considers the cost constraint, which acknowledges that the benefits of reporting financial information should outweigh the costs of doing so.

Management Is Required by GAAP to Reduce Information Risk, Even