Explanation

Both actions are useful for evaluating the quality of financial reports:

Action 1: Learn about the company's management

• Management's integrity, competence, and incentives affect financial reporting quality
• Aggressive management may engage in earnings management or manipulation
• Understanding management's background and track record helps assess reporting reliability

Action 2: Comparing accounting policies with competitors

• Helps identify if the company uses more aggressive accounting policies
• Reveals differences in revenue recognition, expense capitalization, or reserve policies
• Allows assessment of whether the company's policies are consistent with industry norms

Both actions provide complementary information about financial reporting quality. Management quality (Action 1) addresses the "people" aspect, while accounting policy comparison (Action 2) addresses the "methodology" aspect.

Correct Answer: C - Both Action 1 and Action 2