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Why do think the word rational has been dropped

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Reference no: EM132744380

The Framework drops the word "rational" as a description of investor and creditor decision-making. This description appeared in the original 1978 FASB Statement of Financial Accounting Concepts. Instead, in the 2018 Framework, the objective of financial reporting is to help financial statement users "in making decisions relating to providing resources to the entity."

Problem A- Why do you think the word "rational" has been dropped?

Problem B- If investors do not make rational decisions, does this increase or decrease the role of financial reporting in providing useful information to investors? Explain.

Reference no: EM132744380

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