Foltin

School: Grand Canyon University - Course: ACC 502 - Subject: Accounting

I would think that because reliability of financial information requires that it present an unbiased, verifiable account of current economic standing, in the case of land, fair market value would be consistent with the reliability qualification. To your question about reliability, relevance or both, I would offer that if the information is not reliable, then it cannot be completely relevant. However, Foltin and Holtzblatt (2022) discuss the declining relevance of financial statements, citing AirBnB who owns no buildings as the largest hotelier; Amazon, who owns no stores, as the largest retailer; Uber, who owns no vehicles, as the largest transportation company; and Tesla, who is technology based, as 10 times the worth of the second place US automaker. In these cases, revenue is based on intangible assets and not necessarily represented in financial statements (Foltin & Holtzblatt, 2022). So, traditional financial reporting is becoming less relevant and not necessarily reliable where market worth is under-represented on the statements due to intangible assets and the difficulty of representing a company's worth as a result. Investors are finding relevant information through social media and ESG reporting and making decisions based on that information even though there are no formal guidelines around this to ensure the reliability of the information (Foltin & Holtzblatt, 2022). So, based on those findings, it would seem that investors prefer relevance of information and then use their best judgment, gauging the reliability of the information from cultural cues. Even so, where traditional financial information is in question, having an independent auditing firm verify the information quickly after reporting can provide a balance of relevant and reliable information for investors who are using them (Young et al., 2019). Foltin, C., & Holtzblatt, M. (2022, July 1). The Relevance and Reliability of ESG Reporting: What Are the Roles of the ISSB, the SEC, and the Accounting Profession?The CPA Journal, 92(7-8), 42.

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