Question

What is NOT true about traditional financial reporting?

Select one:

a. Traditional financial reporting enables organisations to consider their impacts on wide range of sustainability issues.

b. Traditional financial statements do not show the actions and commitments of a company in relation to its employees, customers, shareholders and society.

c. Traditional financial statements show its economic situation and are the main source of information that the interested parties rely on about the company’s economic performance.

d. Traditional financial statements forgot about the social and environmental costs that the company’s activities have on the economy.

Answer 1

Answer:

Option a: Traditional financial reporting enables organizations to consider their impacts on a wide range of sustainability issues.

Explanation:

Traditional financial reporting refers to recording, classifying, and summarizing the transactions and giving the results to the users. It is the main source of information of company's performance for the interested parties.

Traditional financial accounting did not discuss any qualitative matters such as commitments of the company in relation to employees, customers, social and environmental costs, etc.

So, it can be said that traditional financial reporting did not cover sustainability issues.

Hence, option 'a' is correct, and rest all are incorrect.

In case of any doubt, please feel free to comment.