Which of the following is not an economic consequence of financial reporting?
A) Financial information can affect the distribution of wealth among investors. More informed investors, or investors employing security analysts, may be able to increase their wealth at the expense of less informed investors.
B) Financial information can affect the level of risk accepted by a firm. Focusing on short-term, less risky projects may have long-term detrimental effects.
C) Financial information can affect the rate of capital formation in the economy and result in a reallocation of wealth between consumption and investment within the economy.
D) Financial information can affect the allocation of psychic income among investors.

Question

Quizplus · Accepted Answer

Allocation of psychic income is not an economic consequence of financial reporting as it is related to the personal satisfaction or fulfillment one derives from their investments, rather than actual monetary gains or losses.

Which of the Following Is Not an Economic Consequence of Financial