CFA Practice Question

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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.
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