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CSS Financial and Cost Accounting P-1 QUESTION #1195
Question 1
Accounting information is said to be relevant when it:
  • Is free from material error.
  • Influences the decision-making of users.✔️
  • Can be compared across entities.
  • Is supported by evidence from independent sources.
Correct Answer Explanation
Relevance is a fundamental qualitative characteristic of useful financial information (per IASB Conceptual Framework). Information is relevant if it is capable of making a difference in the decisions made by users — it has predictive value, confirmatory value, or both. Being free from error refers to faithful representation, not relevance.