Since users of financial statements make financial decisions that have real consequences, it is very important that users can depend on the information contained in the financial statements.What term captures this problem?
A)reliability
B)competing incentives
C)complexity
D)remoteness

Question

Quizplus · Accepted Answer

Reliability is the term that best captures the problem described in the question. Financial statement users need to be able to trust that the information presented is accurate and free from bias or errors. If the information is not reliable, users may make decisions based on faulty data, leading to negative consequences. Competing incentives, complexity, and remoteness may also impact the quality of financial statements, but they do not directly address the problem of users needing to rely on the information.

Since Users of Financial Statements Make Financial Decisions That Have