Final answer:
b) Neutrality is NOT a component of faithful representation as defined by the FASB.
Step-by-step explanation:
The component of faithful representation that is NOT defined in the FASB's conceptual framework is neutrality. Neutrality refers to the absence of bias in financial reporting, but it is not explicitly included in faithful representation as defined by the FASB.
On the other hand, the three components of faithful representation as defined by the FASB are:
- Completeness: Financial information is complete if it includes all necessary information for a user to understand and make informed decisions.
- Free from error: Financial information is free from error if it is accurate and reliable, without any material misstatements or omissions.
- Understandability: Financial information is understandable if it is presented in a clear and concise manner, making it comprehensible to users with reasonable knowledge of business and economic activities.