Which statement relating to the Conceptual Framework's concept of understandability that is not true?
A) Information about complex matters should be included in the reports if it is considered relevant.
B) It is expected that users of financial statements will be willing to study the information with reasonable diligence.
C) In preparing financial statements it should be assumed that users possess very little knowledge accounting.
D) Every attempt should be made to communicate information in the most effective manner.

Question

Quizplus · Accepted Answer

The statement "In preparing financial statements it should be assumed that users possess very little knowledge of accounting" is not true. The Conceptual Framework assumes that users of financial statements have a reasonable knowledge of business and economic activities and accounting and a willingness to study the information with reasonable diligence.

Which Statement Relating to the Conceptual Framework's Concept of Understandability