Which of the Following Best Describes the Notes to Financial

question 47

Multiple Choice

Which of the following best describes the notes to financial statements included in an annual report?

• A) They often disclose information about changes in accounting practices and about any special circumstances that had an impact on the firm's financial performance.
• B) They are important to management but usually have little significance to investors and other external stakeholders.
• C) They cite the specific IFRS rulings applied by the auditor and explain the reasons for any concerns the auditor has.
• D) They show the actual calculations used to derive all key figures reported in the financial statement, thus enabling stakeholders to more accurately compare the results of different companies.

---

Definitions:

External Benefits

Positive effects of an economic transaction experienced by people or entities not directly involved in the transaction.

External Costs

Costs that are not borne by the producer or consumer but by third parties or society at large, such as pollution or resource depletion.

External Benefit

A positive effect on a party who did not choose to incur that benefit, often associated with public goods or services.

Public‐spirited

Exhibiting a selfless concern for the well-being of the community and the willingness to act for the public good.