Question

Assessing disclosures does not require reasonable assurance of which of the following?

a. The disclosures are understandable to users.

b. Disclosed events and transactions have occurred and pertain to the entity.

c. All material and immaterial disclosures have been reported.

d. The information is disclosed accurately and at appropriate amounts.

Answer 1

Reasonable assurance for assessing disclosures in financial reporting does not require that all material and immaterial disclosures have been reported as immaterial items that may not influence user decisions. c. All material and immaterial disclosures have been reported.

Step-by-step explanation:

When assessing disclosures in financial reporting, reasonable assurance does not require that all material and immaterial disclosures have been reported. Reasonable assurance focuses on ensuring that the information is understandable, relevant, and accurately represents events that have actually occurred and pertain to the entity. Disclosures should be transparent to provide users with enough information to make informed decisions. However, considering the cost-benefit principle in accounting, not all immaterial disclosures need to be reported as they are unlikely to influence the decision-making of users.

The correct answer to the student's question is:

• c. All material and immaterial disclosures have been reported.