CONDITIONS FOR FINANCIAL STATEMENT TO BE RELIABLE




In order for financial statements to be reliable, they should:

  • not include material error or bias;
  • be a faithful representation;
  • show the substance rather than the legal form of the transaction;
  • be neutral;
  • be prudent (but not to the extent that reserves become hidden); and
  • be complete (within the confines of materiality and cost).
In order for financial statements to be reliable, they should:
not include material error or bias;
be a faithful representation;
show the substance rather than the legal form of the transaction;
be neutral;
be prudent (but not to the extent that reserves become hidden); and
be complete (within the confines of materiality and cost).

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