There are many vital characteristics of Accounting Information that are given bellow:-
• Unaderstandabilty: An essential quality of the information provided in financial statements is that it is readily understandable by users. For this purpose, users are assumed to have a reasonable knowledge of business and economic activities and accounting and a willingness to study the information with reasonable diligence
• Relevance:To be useful, information must be relevant to the decision-making needs of users.Information has the quality of relevance when it influences the economic decisions of users by helping them evaluate past, present or future events or confirming, or correcting, their pastevaluation.
• Reliability: This implies that the accounting information that is presented is truthful, accurate, complete (nothing significant missed out) and capable of being verified by a potential investor
• Consistency: This implies consistent treatment of similar items and application of accounting policies.
• Comparability: This implies the ability for users to be able to compare similar companies in the same industry group and to make comparisons of performance over time. Much of the work that goes into setting accounting standards is based around the need for comparability.
• Neutrality:The information contained in financial statements must be neutral, that is, free from bias.Financial statements are not neutral if, by the selection or presentation of information, theyinfluence the making of a decision or judgment in order to achieve a predetermined result or outcome.
• Prudence (Conservation):Is the inclusion of a degree of caution in the exercise of the judgments needed in makingthe estimates required under conditions of uncertainty., such that assets or income are notoverstated and liabilities or expenses are not understated.
• Completeness:The information in financial statements must be complete within the bounds of materiality and cost. An omission can cause information to be false or misleading and thusunreliable and deficient in terms of its relevance
• Unaderstandabilty: An essential quality of the information provided in financial statements is that it is readily understandable by users. For this purpose, users are assumed to have a reasonable knowledge of business and economic activities and accounting and a willingness to study the information with reasonable diligence
• Relevance:To be useful, information must be relevant to the decision-making needs of users.Information has the quality of relevance when it influences the economic decisions of users by helping them evaluate past, present or future events or confirming, or correcting, their pastevaluation.
• Reliability: This implies that the accounting information that is presented is truthful, accurate, complete (nothing significant missed out) and capable of being verified by a potential investor
• Consistency: This implies consistent treatment of similar items and application of accounting policies.
• Comparability: This implies the ability for users to be able to compare similar companies in the same industry group and to make comparisons of performance over time. Much of the work that goes into setting accounting standards is based around the need for comparability.
• Neutrality:The information contained in financial statements must be neutral, that is, free from bias.Financial statements are not neutral if, by the selection or presentation of information, theyinfluence the making of a decision or judgment in order to achieve a predetermined result or outcome.
• Prudence (Conservation):Is the inclusion of a degree of caution in the exercise of the judgments needed in makingthe estimates required under conditions of uncertainty., such that assets or income are notoverstated and liabilities or expenses are not understated.
• Completeness:The information in financial statements must be complete within the bounds of materiality and cost. An omission can cause information to be false or misleading and thusunreliable and deficient in terms of its relevance
0 comments:
Post a Comment