ACCA Applied Knowledge · Financial Accounting · Qualitative characteristics of useful financial information
Which statement about verifiability is consistent with the Conceptual Framework?
Verifiability means that different knowledgeable and independent observers could reach consensus that information faithfully represents what it purports to represent. It does not require freedom from estimates. Providing information in time describes timeliness, and clear presentation describes understandability.
- AIt means information must be free from any estimation uncertainty
- BIt means different knowledgeable and independent observers could reach consensus that a depiction is faithfully representedCorrect
- CIt means information must be provided before it loses its capacity to influence decisions
- DIt means information must be presented clearly and concisely
Explanation
Verifiability means independent observers could agree that information is a faithful representation, even if not necessarily identical figures. It can be direct (counting cash) or indirect (recomputing with an inputs). The first option is wrong because estimates can be verified; the third describes timeliness and the fourth understandability.
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