- CFA Exams
- CFA Level I Exam
- Topic 3. Financial Statement Analysis
- Learning Module 17. Financial Reporting Standards
- Subject 6. Effective Financial Reporting
CFA Practice Question
The characteristics of an effective financial reporting framework do not include ______.
II. transparency
III. reliability
IV. comprehensiveness
V. consistency
I. relevance
II. transparency
III. reliability
IV. comprehensiveness
V. consistency
A. II, IV and V
B. I and III
C. II and IV
Explanation: The three characteristics are transparency, comprehensiveness, and consistency.
User Contributed Comments 8
| User | Comment |
|---|---|
| BryanKec | Effective financial reporting frameworks share three characteristics: transparency, comprehensiveness and consistency. Relevance and reliability are qualitative characteristics of financial statements (not framework). This is what the textbook says. |
| rana1970 | Relevence, reliability, consistancy and comparability are 4 characteristics of accounting information. the 3 characteristics (transparency, comprehensiveness and consistancy) mentioned here are for financial reporting framework. |
| mary11 | doh' do not include - must read the question! |
| ldfrench | So many "characteristics" to remember that all essentially say the same thing. BS. |
| leon121 | I don't know why this question is considered DIFFICULT. All you have to do is memorize the effective characteristics of financial reporting: Trains Come Consistently and read the question carefully. |
| farhan92 | Leon if you lived in london you would know that trains do not come consistently! |
| mvross | The crux of financial reporting is providing transparency to stakeholders. Thus, you can remove A and C pretty quickly when trying to decide. |
| Fortschrit | Thank you for the "trains come consistently" comment leon. In Switzerland and Singapore they do come consistently, in London they should! |