Qualitative Characteristics of Accounting Information:
Accounting information can be used by business owners to carry out a financial analysis of the businesses and their operations. The use of this information for such function is attributed to the fact that it usually contains quantitative and qualitative characteristics. While quantitative characteristics are the calculations of financial transactions while qualitative characteristics can be described as the business owner’s apparent significance of financial information. In essence, qualitative characteristics of financial information are attributes that contribute to the usefulness of information provided in financial statements. Since these qualities can sometimes be at odds with each other, they need to be balanced against each other. In addition, these qualities are essential in decision making because they provide the basis for assessing businesses and the effectiveness of their operations.
Qualitative Characteristics:
As previously mentioned, qualitative characteristics in accounting are attributes that result in the usefulness of provided financial information by users. These characteristics are important in the modern business environment because of their significance in making business decisions. Actually, these characteristics help in promoting appropriate decision-making and correct assessments of business operations (Vitez, n.d.). Generally, there are four principal qualitative characteristics of accounting information i.e. relevance, reliability, understandability, and comparability.
As one of the fundamental qualitative characteristics of financial information, relevance refers to the ability of the provided accounting information to remain aligned wi...
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...r handling of financial transactions and usefulness promotes applicability of the information in decisions. Relevance is used during trend analysis of financial information while reliability ensures the development and sustenance of accurate accounting information. In addition, relevance also ensures that accounting information is available to users at the appropriate time in the decision making process.
In conclusion, accounting information consist quantitative and qualitative characteristics, which play a crucial role in the use of accounting information. Generally, qualitative characteristics are attributes associated with the seeming importance of financial information and used for decision making. Some of the major qualitative attributes of accounting information include reliability, relevance, consistency, understandability, comparability, and usefulness.
Naomi Nye was born to a German-American mother and a Palestinian-American father. However, she normally writes from her Palestinian-Arab perspective. In several of her poems within The Heath Anthology—“Ducks,” “My Father and the Figtree,” and “Where the Soft Air Lives”—Naomi Nye reminisces about her Muslim heritage and childhood as it correlates to her present identity. In addition, she incorporates the effect of the Palestinian-Israeli conflict on herself and on Arab culture in her work. Ultimately, Naomi Nye’s poetic work should remain in The Heath Anthology as her style demonstrates how historical events and a deep-rooted heritage can enrich a sense of identity and culture.
One of the most debatable topics in the accounting industry today is the extent in which we should make the financial statements understandable to the general population. The FASB currently gears its reporting standards toward...
Over the decades and centuries many honorable people have come and gone. Their actions have shaped the world we know today. Examples of such people are Seikei, a fictional character but still an honorable one, Mother Teresa, and Ronald W. Reagan. Except for the fact that they are all virtuous these people are very different.
Recent events in Canadian politics have shocked the artistic sector in Canada. The conservative party of Stephen Harper attacked the arts and culture sector by cutting funds to some major art programs in the country. Art has played an important role in the development of societies around the world. Everything from social structure and religion to politics and military was reflected in various forms of art; from painting and sculpture to theatre and dance. Ancient Egyptians build pyramids and had symbolic depictions of deities. Ancient Greeks, the fathers of democracy, were the masters of pottery, sculpture as well as architecture and painting. In ancient times art was not isolated from science, philosophy and of course politics. Everyday political, social, military and economical affairs were reflected in the arts, and vice versa. Artists were the thinkers, and thought provokers of the culture. In the Renaissance artists were synonymous with progress, invention and liberalism. They were the builders and reinforcers of cultural value and tradition. Modern day is seeing a variety of art forms that reveal the culture that art is produced within. Canada is a country rich in history, traditions and multiculturalism. It is important to sustain and develop the art sector in Canada in order to maintain and “voice” Canadian culture and identity. Moreover, the art industry in Canada not only improves the cultural fabric of the country, it also showing significant revenue to the government. The Harper Government funding cuts to the arts and culture sector is an unjustified act of censorship. Underfunding of Arts in Canada will hinder the development of values and unity in Canadian culture and Identity as well as hinder freedom of exp...
Marshall, M.H., McManus, W.W., Viele, V.F. (2003). Accounting: What the Numbers Mean. 6th ed. New York: McGraw-Hill Companies.
Financial and Managerial accounting are used for making sound financial decisions about an organization. They provide information of past quantitative financial activities and are useful in making future economic decisions. (Albrecht, Stice, Stice, & Skousen, 2002) The same financial data is used to derive reports for each accounting process yet they differ in some ways. Financial accounting primarily provides external reports for external users such as stock holders, creditors, regulating authority and others. (Garrison, Noreen, & Brewer, 2010) On the other hand Managerial accounting is concern with providing information that deals with the internal viability of the organization and is tailored to meet the needs of an individual organization. (Albrecht, Stice, Stice, & Skousen, 2002)
(i) Judgement and materiality play a significant role in helping to ensure that the selection of accounting policies in presenting the financial statements for a true and fair picture of the company’s financials. This means that entities should provide the financial statements with comparability, consistency and clarity to users of these statements. Entities must follow accounting policies required by IFRS and AASB should be relevant to particular circumstance.
These accounting information are so much important for the business owner or financial statements reader to analyze the company and make the economics decision.
Accounting principles are main consideration , certain standards like rules of operations are pillar characteristicis to built accounting statements. Accounting principles can be presented in many ways, sometimes its create confusion for readers mainly for beginners, but still acoounting principles are main tool to obtained financial statements. Its hold the whole acoounting process together.
"The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions."[Financial statements should be understandable, relevant, reliable and comparable. Reported assets, liabilities and equity are directly related to an organization's financial position. Reported income and expenses are directly related to an organization's financial performance.
The users of financial statement have definite objectives to analysis and interpret .Therefore; there are variations in the objectives of interpretation by various classes of people. However, there are certain specific and common objectives which are listed below:
Qualitative features of financial information are imperative in making decisions for the firms and corporate. Financial information reveals a firm’s ava...
The purpose of this document is to describe the nature, purpose and scope of accounting and it deliberately explains the details of each category in accounting. Accounting involves in preparing financial documents of an entity by analyzing, verifying, and reporting this records. It emphasizes its major characteristic role in field of banking and finance, with a mixture of supportive sub topics.
The level of accounting quality in terms of earnings management, timely loss recognition and more value relevance were better in firms that applied IAS. All this being presented in a very relevant manner clearly displaying compositions of the firms selected. Evidence showed that there was less earnings management in firms that applied IAS as the IAS left less room for manipulation to results to present desired financial picture of a firm, earnings were less smoothed and hence there was larger variances in earning reported specially with respect to earnings, cash flows and accruals and hence showing the actual picture to users of financial statements. (Lang, [2003]) Secondly, when evaluating value relevance is was concluded that as inherently high as well, the value for listed and regulated firms the relevance was high before and after adoption, hence no significant change. Lastly, with reference to timely loss recognition, again it was evidenced that all loses were timely reported and not allowed to be carried forwards or left to be recognized on the discretion of the management, as consistency in policies is expected to be applied once IASs are adopted. There were some evidence however, that suggested that in some firms belonging to particular industries, in some countries showed no significant variance in time loss recognition and