Asked by Lungile Shange on May 29, 2024
Verified
Qualitative and quantitative characteristics
i. Distinguish between qualitative and quantitative characteristics.
ii. At what point in the six-step decision-making process do the qualitative characteristics have an impact?
Qualitative Characteristics
The attributes that make financial information useful to users, including relevance and faithful representation.
Quantitative Characteristics
Measurable attributes that can be quantified and analyzed numerically, often used in statistical and financial analysis.
Decision-making Process
The systematic approach of identifying and evaluating choices to come to a conclusion or course of action.
- Understand the differences between qualitative and quantitative characteristics and their impacts on decision-making processes.
- Understand the relevance of information, including its characteristics, for making informed decisions.
Verified Answer
ii. The qualitative characteristics have an impact at the last step of the process when they are brought together with the results of the quantitative analysis developed during the first five steps. However, in some situations, the qualitative characteristics may shape the choice of alternatives (step three). For example, some alternatives may be rejected immediately because of ethical considerations.
Learning Objectives
- Understand the differences between qualitative and quantitative characteristics and their impacts on decision-making processes.
- Understand the relevance of information, including its characteristics, for making informed decisions.
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