ACCA Applied Knowledge · Financial Accounting · Qualitative characteristics of useful financial information
A listed company publishes its annual financial statements 14 months after the year end, by which time the information no longer influences users' decisions. Which enhancing qualitative characteristic has primarily been breached?
Timeliness has been breached. Timeliness means information is available to decision-makers in time to influence their decisions, and publishing statements 14 months after the year end means they are likely to be of little use. Verifiability, understandability and comparability are not the primary issue.
- ATimelinessCorrect
- BVerifiability
- CUnderstandability
- DComparability
Explanation
Timeliness means having information available to decision-makers in time to be capable of influencing their decisions. Older information generally has less utility. The delay does not relate to agreement between observers or to clarity of presentation.
Did you get it right without looking?
One question tells you little. A timed set on Qualitative characteristics of useful financial information shows your real accuracy, how long you take and where you lose marks.
More Qualitative characteristics of useful financial information questions
- Which statement about verifiability is consistent with the Conceptual Framework?
- Drover Co's directors delay publishing results for several months to gather fully verified evidence on a complex estimate, by which time the…
- Which of the following is an example of the application of prudence, as the Conceptual Framework now describes it, without introducing bias?
- A finance director proposes to create a general provision of $50,000 for unspecified future losses, so that profit is lower this year and hi…
- Information is relevant under the Conceptual Framework if it is capable of making a difference to users' decisions. Which pair of attributes…
- A company's finance director proposes creating a general provision of $50,000 in a profitable year, for no identified obligation, so that pr…