ACCA Applied Knowledge · Financial Accounting · Stakeholders' needs
Which of the following statements about the characteristics of management information compared with financial statements is correct?
Management information may include non-financial data, forecasts and estimates to suit managers, while financial statements are limited to the financial information required by IFRS and law and are mainly historic. Filing and audit requirements apply to financial statements, not management information.
- AManagement information is always historic, whereas financial statements include forecasts
- BManagement information may include non-financial data and estimates, whereas financial statements are limited to the financial information required by IFRS and lawCorrect
- CManagement information must be filed with a regulator, whereas financial statements are confidential
- DManagement information must be audited, whereas financial statements need not be
Explanation
Management information can contain non-financial measures, forecasts and estimates to suit managers. Financial statements must meet regulatory requirements and are mainly historic. Filing and audit requirements apply to financial statements, not management information, so C and D are wrong, and A reverses the time orientation.
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