What does the principle of verifiability in GAAP emphasize?

What does the principle of verifiability in GAAP emphasize?

• A. Financial information must be regularly updated
• B. Financial information must be supported by reliable evidence
• C. Financial information must align with international standards
• D. Financial information must be approved by management

Answer: (B)

The principle of verifiability in GAAP emphasizes that financial information should be supported by reliable evidence. This means that the data reported in financial statements must be capable of being checked and confirmed by independent observers or auditors. Verifiability ensures that the information can be validated through various means, such as documentation, sources, and corroborating details, which fosters trust and transparency. When financial information is verifiable, it enhances the reliability of the financial statements, allowing stakeholders to have confidence in the numbers presented. The aspect of verifiability does not require that financial information is regularly updated, mandates alignment with international standards, or necessitates approval by management, which are not fundamental to the essence of verifiability itself.

The principle of verifiability in GAAP emphasizes that financial information should be supported by reliable evidence. This means that the data reported in financial statements must be capable of being checked and confirmed by independent observers or auditors. Verifiability ensures that the information can be validated through various means, such as documentation, sources, and corroborating details, which fosters trust and transparency. When financial information is verifiable, it enhances the reliability of the financial statements, allowing stakeholders to have confidence in the numbers presented.

The aspect of verifiability does not require that financial information is regularly updated, mandates alignment with international standards, or necessitates approval by management, which are not fundamental to the essence of verifiability itself.