Reasons that traditional financial accounting may be unable to reflect the social and environmental impact of organisations do not include:
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 option is incorrect as it implies that accountants are not able to understand social and environmental impacts, when in reality they may simply lack the tools or mechanisms to accurately measure these impacts. Options A, B, and D are valid reasons why traditional financial accounting may not reflect social and environmental impacts.

Reasons That Traditional Financial Accounting May Be Unable to Reflect