Which of the following is not a reason why traditional financial accounting may be unable to reflect the social and environmental impact of organisations?
A) Externalities are difficult to measure.
B) Traditional financial accounting typically discounts future liabilities to present value.
C) Accountants are unable to understand the social and environmental impacts of an organisation.
D) Traditional financial accounting adopts the 'entity assumption'.

Question

Quizplus · Accepted Answer

This statement is not true. Accountants are able to understand the social and environmental impacts of an organisation, but traditional financial accounting may not provide a framework to capture and measure such impacts. The other options - externalities being difficult to measure, discounting future liabilities, and the 'entity assumption' in financial accounting - are all factors that contribute to the limitations of traditional financial accounting in reflecting social and environmental impact.

Which of the Following Is Not a Reason Why Traditional