Under Statement of Financial Accounting Concepts No. 8, the ability through consensus of measures to ensure that information represents what it purports to represent is an example of the concept of

Question

Steve Harrell

Business

23 February, 01:56

Under Statement of Financial Accounting Concepts No. 8, the ability through consensus of measures to ensure that information represents what it purports to represent is an example of the concept of

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Desmond Andrews · Answer 1

Faithful representation

Explanation:

Financial reports represent economic phenomena in words and numbers. To be useful, financial information not only must represent relevant phenomena, but it also must faithfully represent the phenomena that it purports to represent. To be a perfectly faithful representation, a representation would have three characteristics; It would be complete, neutral, and free from error.

A complete representation includes all information necessary for a user to

understand the phenomenon being represented, including all necessary descriptions and explanations.

A neutral representation is without bias in the selection or presentation of financial information.

Free from error means there are no errors or omissions in the description of the phenomenon, and the process used to produce the reported information has

been selected and applied with no errors in the process.