Question
In: Accounting
Why is reliability an important characteristic of accounting? What factors constitute reliable information or information sources?
Why is reliability an important characteristic of accounting? What factors constitute reliable information or information sources?
Solutions
Expert Solution
Reliability of Accounting Information is one of the important characteristic of Accounting . Reliability refers the trustworthiness of financial records and all the statement that maintained by the company.
In other words, Reliability refers that all the accounting information that present accuracy, complete information about the company. Reliability is necessary for all the stakeholders because all the stakeholders are depend on the information that is provided by the company and help in decision making. So, the reliability of information becomes a very important part of the company.
There are various factors constitute reliable information
1. Verifiability of information
Financial records are verificable by various measure to come up with desire results. Internal and external auditors plays a very important role. Auditors and other third party take measures to evaluate all the financial statement of the company. So, it is necessary for the compamy to take steps towads appropriate measures time to time for the reliabilty of the information.
2. Neutrality of information
To maintain neutrality of information, company is required to maintain unbiased information while records financial statement. All the information provided by the company must be free fron errors beacause information provided by the company affects the decision making of the stakeholders. So it is neccessary to be neutral.
3. Faithfulness
Company maintain goodwill in the market because of its trustworthiness and Faithfulness. So, it is neccessary for the company to represent what actually happened not the wrong information. So the company must show information in the financial statement that is accurate.
All these facors constitute reliable information
ekkarill92 answered 1 year agoRelated Solutions
What are some of the important factors that influence exchange rates? How reliable are these factors...
What are some of the important factors that influence exchange rates? How reliable are these factors...
The purpose of this assignment is to apply knowledge of reliable and valid information sources to...
The purpose of this assignment is to apply knowledge of reliable and valid information sources to...
1. What is Marketing information and why is it important?cite sources 2. What is Marketing research...
Why is a defined information architecture necessary to be assured of accurate/reliable accounting and financial management...
Why is transparency; information quality/reliability and good governance important for corporations and for the financial markets...
What is Reliability? Why is it important in the context of HR selection? Explain in detail...
Why are internal and external sources of information important to identify business trends?
Why are the measurement concepts of reliability and validity important to the research process? What dangers...
- Non-constant growth model: Do=$2.00 required return on equity= 5% g= 9% n=1,2 g=7% n=3,4 g=3% n=5...
- . Find all x ∈ Z143 such that x2Ξ 7 (mod 143). Please explain all steps...
- #Python: A palindrome is a sequence of characters that reads the same backwards as forwards. For...
- Explain an example in which a variable has two different addresses at different places in a...
- Hadley, a thirty-five-year-old physician, has worked at Princeton Plainsboro Hospital for six years. She recently received...
- QUESTION 1. For each of the following, state whether the occurrence of the variable x occurs...
- According to Mike Taft of RVK, the “Markets Group” is an important unit of the Federal...