Users of financial statements should consider which of the following when evaluating the quality of accounting information?
A) Economic faithfulness of accounting measurements and classifications.
B) Reliability of the measurements.
C) Reasonableness of the estimates made in applying GAAP or IFRS.
D) All of these should be considered.

Question

Quizplus · Accepted Answer

All the options listed (economic faithfulness, reliability, and reasonableness of estimates) are important factors that users of financial statements should consider when evaluating the quality of accounting information. Economic faithfulness ensures that the accounting measurements and classifications are in line with the underlying economic reality. Reliability ensures that the information is trustworthy, verifiable, and free from material errors or biases. Reasonableness of the estimates made in applying GAAP or IFRS ensures that the financial statements are not materially misstated due to differences in judgment and assumptions made by management. Therefore, all of these factors should be considered to assess the quality of accounting information.

Users of Financial Statements Should Consider Which of the Following