The principle of adequate disclosure means that a company should disclose:
A)Only the important monetary information.
B)All confidential information regarding the company.
C)Any financial facts that a reasonably informed person would consider necessary for the proper interpretation of the financial statements.
D)Only subsequent events.

Question

Quizplus · Accepted Answer

The principle of adequate disclosure means that a company should disclose any financial facts that a reasonably informed person would consider necessary for the proper interpretation of the financial statements. This means that only important monetary information should not be disclosed, as well as confidential information that may harm the company's interests. The disclosure should be extensive enough to provide an accurate and truthful representation of the company's financial position and performance. Only subsequent events being disclosed does not satisfy the principle of adequate disclosure.

The Principle of Adequate Disclosure Means That a Company Should