Traditional Financial Accounting Is Limited in Its Ability to Reflect

Traditional financial accounting is limited in its ability to reflect the effects of externalities in annual reports because:

A) The application of the entity assumption excludes effects not directly related to the entity itself.
B) There is no scope to provide non-financial information in annual reports.
C) The application of the concept of materiality excludes externalities because they are typically difficult to measure.
D) The application of the entity assumption excludes effects not directly related to the entity itself and the application of the concept of materiality excludes externalities because they are typically difficult to measure.