CFA Practice Question

There are 89 practice questions for this study session.

CFA Practice Question

Which statement is true regarding financial reporting quality and earnings quality?
A. A financial report is considered to be high quality if it conforms to the GAAP.
B. If earnings quality is low, the financial report's quality must be low.
C. It is possible that poor reporting quality to occur with high-quality earnings.
Explanation: A is false. GAAP is the "minimum standards".
B is false. However, poor reporting quality often occurs simultaneously with poor earnings quality.
C is true. A company with high-quality earnings may produce poor quality reports.

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