- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 1. Introduction to Financial Statement Analysis
- Subject 2. The Roles of Financial Statement Analysis
CFA Practice Question
True or False: Estimates and judgments are two elements that may weaken the usefulness of financial statement information.
Correct Answer: True
Estimates and judgments hamper the reliability of financial statement information and are considered weaknesses. This is due to the fact that they are subjective in nature and deal with uncertain information.
User Contributed Comments 3
| User | Comment |
|---|---|
| surob | Estimates and judgements can be used if information is immaterial |
| yonghui | yes, the innaterial information can use both them. |
| magicchip | Except both are used in certain asset valuations, which would make it material. |