What term is used to describe accounting standards that encourage risk-taking in financial reporting?

Question

Quizplus · Accepted Answer

Optimism refers to accounting standards that encourage risk-taking in financial reporting as they are based on the assumption that good things will happen in the future. This can lead to overestimation of revenues and assets and underestimation of liabilities and expenses, resulting in more favorable financial reporting.

What Term Is Used to Describe Accounting Standards That Encourage