elect the most correct answer: Identify which of the following terms, if any, are fundamental qualitative characteristics:a.Prudenceb.Neutralityc.Completenessd.More than one of the abovee.None of the above.
Question
elect the most correct answer: Identify which of the following terms, if any, are fundamental qualitative characteristics:a.Prudenceb.Neutralityc.Completenessd.More than one of the abovee.None of the above.
Solution
d. More than one of the above
Explanation: According to the Conceptual Framework for Financial Reporting issued by the International Accounting Standards Board (IASB), the fundamental qualitative characteristics of useful financial information are relevance and faithful representation.
Neutrality is an aspect of faithful representation, which means that financial information must be free from bias.
Completeness is also an aspect of faithful representation, which means that all necessary information is provided.
Prudence is not considered a fundamental qualitative characteristic according to the IASB. It is instead considered a component of neutrality.
Therefore, the correct answer is d. More than one of the above, as both neutrality and completeness are fundamental qualitative characteristics.
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