Which Statement Relating to the Conceptual Framework's Concept of Understandability

question 7

Multiple Choice

Which statement relating to the Conceptual Framework's concept of understandability is incorrect?

• A) Information about complex matters should be included in the reports if it is considered relevant to decision making.
• B) It is expected that users of financial statements will be willing to study the information with reasonable diligence.
• C) The financial reports are required to be simple to read and understand.
• D) It is assumed that readers of financial reports have a reasonable knowledge of business and economic activities.

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Definitions:

Indirectly Revealed

Information or characteristics that are not explicitly stated but can be inferred or understood through indirect evidence or implication.

Expressive Behavior

Actions that convey internal states, emotions, or attitudes, often serving as a form of non-verbal communication among individuals.

Functional Autonomy

refers to a concept in psychology where behavior continues to be exhibited even after the original motivations or needs behind it have been satisfied, indicating an evolution of motive.

Reflexes

Automatic, involuntary responses to specific stimuli.