Final answer:
The enhancing qualitative characteristics of financial statements include relevance, faithful representation, comparability, and verifiability.
Step-by-step explanation:
The enhancing qualitative characteristics of financial statements are the qualities that make the financial information useful and reliable for users. These characteristics include:
- Relevance: Financial information is relevant if it is capable of influencing the decisions of users by helping them evaluate past, present, or future events or confirming or correcting their past evaluations.
- Faithful representation: Financial information is faithfully represented if it is complete, neutral, and free from error. It reflects the economic substance of transactions and events, rather than just their legal form.
- Comparability: Financial information is comparable if it allows users to identify and understand similarities and differences between different entities or between different periods for a single entity.
- Verifiability: Financial information is verifiable if different knowledgeable and independent observers can reach a consensus that it faithfully represents the economic substance of a transaction or event.