ACCA Strategic Business Reporting (SBR) Practice Exam

Which of the following is NOT considered a qualitative characteristic in FRS 102?

1. Completeness

2. Verifiability

3. Materiality

4. Relevance

The correct answer is: Verifiability

In the context of FRS 102, qualitative characteristics of financial information are essential for ensuring that the information is useful to users. The framework outlines several key qualitative characteristics that enhance the usefulness of financial reporting. Verifiability refers to the ability to ensure that different knowledgeable and independent observers can reach a consensus that a particular depiction is a faithful representation. This characteristic is not categorized as a qualitative characteristic under FRS 102; rather, it is a subset of the overall framework for ensuring reliable financial reporting. On the other hand, completeness, materiality, and relevance are indeed recognized as qualitative characteristics. Completeness ensures that financial statements are fully informative, materiality provides guidance on what information is significant enough to impact decisions, and relevance ensures that the provided information is pertinent to the decision-making needs of users. Understanding these distinctions helps clarify how financial information should be presented to maintain its integrity and usefulness in accordance with the framework established in FRS 102.