[ScruffMcGruff]

Hi guys, long time reader, first time poster! I am studying for FAR right now and using Becker as my review source. Overall, I think I’m doing well on the MC (~75% per section on the first run through) and can understand the reasoning behind questions that I got wrong, after seeing the correct answer. There is one question in particular, however, that I do not understand the logic to (it’s from F1). Personally, I think the question is either written poorly, or the material within Becker does not address this. Anyhow, here’s the question:

According to the FASB and IASB conceptual frameworks, useful information must exhibit the fundamental qualitative characteristics of:

A) Comparability and Materiality

B) Faithful Representation and Relevence

C) Understandability and Timliness

D) Neutraility and Verifiability

Becker says the correct answer is B. To be honest, before I even looked at the answers I thought it would be Relevance and Reliability (the two primary decision-specific qualities), but that was not an answer. The explanation given for Becker’s answer is just that “They are the fundamental qualitative characteristics.”

Secondly, of the list of answers given, all the compenents listed are included in the hierarchy of “Qualitative Characteristics of Accounting Information” according to Becker. With this being said, I initially thought all of the answers looked plausable after I did not find Relevance and Reliability as a given answer.

After thinking about why B is the correct answer, the only reasoning I can come up with is that faithful representation is a subcategory of Relevance (which is part of my Reliability and Relevance answer I initially came up with). To be honest though, it really doesn’t make sense that a secondary characteristic is still a ‘fundamental characteristic’ when the other answers that were listed are not.

Anyhow, if anyone could help me out with this question, that would be great!

AUD - 85
FAR - 78 (lol@ FAR Sims)
REG - 85
BEC - August

[hilaryh_88]

Hi,

That was a part of some changes that could be tested starting in 2011. In my Yaeger notes I have written down that the Fundamental Qualitative Characteristics are: Relevance and Representational Faithfulness. With the changes, representational faithfulness is no longer a subcategory of Relevance. Under Relevance is Predictive Value and Confirmatory Value.

AUD - 82 Becker
BEC - 75 Becker
REG - 71, 82 Becker
FAR - 66,61,71,74,70 and #6 80!!!! FINALLY DONE!!! 9/20/12
Yaeger and Yaeger CRAM for the final battle!

[RedRage00]

Those are changes that can be tested starting 7/1/11. Becker should have updated you.

Texas CPA
Licensed, March 2012

[ScruffMcGruff]

Okay, this makes much more sense now. I totally forgot to check Beckers website for updated pages when I started FAR (although I updated the software…). This and 1-2 other questions pertaining to SFAC 2 were making me so angry!!!

Thanks for your help guys!

AUD - 85
FAR - 78 (lol@ FAR Sims)
REG - 85
BEC - August

[Author]

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