The assumption of faithful representation includes which of the following?

Faithful representation is a fundamental characteristic of financial reporting that ensures the information presented reflects the economic phenomena it purports to represent. This means that the financial statements must be complete, free from material error, and unbiased.

When financial statements are complete, they include all necessary information that users need to understand the financial position and performance of the entity. Being error-free implies that there are no significant mistakes that could mislead the users. Furthermore, unbiased reporting means that the information is neutral and free from any influence that could distort the representation of the entity’s financial performance.

In contrast, the other options do not align with the concept of faithful representation. For example, subjectively interpreting information can lead to biased or incomplete financial reports, undermining their reliability. Reporting only positive results would skew the view of the entity’s performance, thereby failing to provide a complete and truthful picture. Lastly, the speed at which financial statements are prepared does not influence the quality of the representation; rather, it is crucial that the information is accurate and carefully documented, even if that takes additional time.

Thus, the requirement for financial statements to be complete, error-free, and unbiased aligns perfectly with the principle of faithful representation.