The concept of 'soft numbers' reflects that
A)financial statement numbers may be manipulated.
B)sometimes significant measurement uncertainty exists.
C)earnings numbers may not be sustainable.
D)sometimes significant errors exist.

Question

Quizplus · Accepted Answer

The concept of 'soft numbers' refers to situations where significant measurement uncertainty exists and the reported numbers may not be completely accurate. This can occur, for example, when estimating the value of hard-to-measure assets or liabilities, or when using subjective estimates such as the useful life of an asset or the probability of an uncertain event occurring. This concept is distinct from financial statement manipulation, unsustainable earnings, or significant errors, which may also be factors that impact the accuracy of financial statement numbers.

The Concept of 'Soft Numbers' Reflects That