SFAC No. 5 appears to deny one of the main tenets of the efficient markets hypothesis.

Question

Quizplus · Accepted Answer

SFAC No. 5 recognizes that financial statements may not always reflect all available information and therefore, investors may not have all the information they need to make informed decisions. This contradicts the efficient markets hypothesis, which assumes that all available information is already incorporated into the stock price.

SFAC No 5 Appears to Deny One of the Main Tenets