CFA Level I · CFA Level I Exam · Introduction to Financial Statement Analysis
Which financial statement note is most likely to describe the accounting policies and estimates used in preparing the statements?
The notes to the financial statements describe the accounting policies and significant estimates used. They are an integral part of the statements. Management commentary is a separate narrative, and the auditor's report only expresses an opinion on whether the statements are fairly presented.
- ANotes to the financial statementsCorrect
- BManagement commentary
- CAuditor's report
Explanation
Notes to the financial statements disclose accounting policies, significant estimates and supporting detail. Management commentary and the auditor's report sit outside the statements themselves.
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