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The 2018 Framework also states that financial statement users need information about "future cash flows" from their investments. Thus, some linkage between current financial statement information and future cash flows is needed. The concept of an information system provides such a linkage.
Problem A- What are the effects of relevance and reliability of financial information on the main diagonal probabilities of the information system? Why do these desirable qualities have to be traded off when conditions are not ideal?
Problem B- Define "relevance" and "reliability" as part of your answer.
Problem C- Does an MD&A assist with providing information about future cash flows? Please explain your "Yes" or "No"
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