Reference no: EM132879602

Question - Relevance versus Faithful Representation - You are listening to two accounting majors, both of whom are seniors. They are debating the merits of having relevant versus faithfully presented accounting information for external decision making. One student states, "In my decision making, if given a choice between relevant and representationally faithful accounting information, I would prefer to have relevant information." The other student replies, "Nonsense! If you cannot rely on the information, then of what use is it?"

Required - Based on your knowledge of the FASB's Conceptual Framework, define the qualitative charateristics of relevance and faithful representation. Include definitions of the ingredients of each. Which do you think is more important?