Situations in which aggregated data may be sufficient to evaluate the performance of an entity include:
A) where the entity has not existed for a long period of time.
B) where the segments of the entity have highly correlated profit prospects.
C) where the entity has a large consolidated asset base.
D) where the entity operates in different geographic areas with different risks.

Question

Quizplus · Accepted Answer

When the segments of the entity have highly correlated profit prospects, aggregated data may be sufficient to evaluate the overall performance of the entity as a whole. This is because the performance of each segment is likely to have a similar impact on the overall performance of the entity. In contrast, options A, C, and D may require more detailed analysis of specific factors that may impact the entity's performance.

Situations in Which Aggregated Data May Be Sufficient to Evaluate