- CFA Exams
- CFA Exam: Level I 2021
- Study Session 6. Financial Reporting and Analysis (1)
- Reading 20. Financial Reporting Standards
- Subject 3. The International Financial Reporting Standards Framework
CFA Practice Question
Reliable information is free from material error and bias. Which factors contribute to the reliability of financial statements?
II. Materiality
III. Completeness
IV. Prudence
I. Neutrality
II. Materiality
III. Completeness
IV. Prudence
Correct Answer: I, III and IV
Other reliability factors include faithful representation and substance over form.
User Contributed Comments 5
| User | Comment |
|---|---|
| bundy | Materiality is part of relevance |
| erinelize | If reliable information is free from "material" error, doesn't it stand to reason that materiality is a factor that contributes to reliability? |
| sarathbs | Good point |
| 2014 | The answer should be Neutrality and completeness - if Faithfull represenation is same as Reliability. |
| johntan1979 | If something is material (e.g. affects the price of the share), it is RELEVANT, not reliable. |