Which accounting assumption or principle is being violated if a company is a party to major litigation that it may lose and decides not to include the information in the financial statements because it may have a negative impact on the company's stock price?

Question

Quizplus · Accepted Answer

The accounting assumption of full disclosure requires companies to include all material information in their financial statements, including any potential risks or uncertainties that may have a significant impact on the company's financial position. By choosing not to disclose the potential impact of major litigation, the company is violating the principle of full disclosure.

Which Accounting Assumption or Principle Is Being Violated If a Company