For a financial report to be reliable, it must
A) be free from material misstatement.
B) have an impact on the decisions made by users regarding the performance of the entity.
C) be periodically audited by an independent auditor.
D) none of the above

Question

Quizplus · Accepted Answer

For a financial report to be reliable, it must be free from material misstatement. This means that the information presented must be accurate, complete, and free from errors or omissions that could affect the decision-making of users. While periodic independent audits are important in ensuring the accuracy and reliability of financial reports, they are not the only factor that determines reliability. Similarly, the impact of the report on user decisions is important, but it is not the only criterion for reliability.

For a Financial Report to Be Reliable, It Must