On the Quality Characteristics and Reliability of Accounting Information

On the Quality Characteristics and Reliability of Accounting Information

No matter in study or work, papers are the most familiar things for everyone. Writing papers can cultivate our scientific research ability. Then the question comes, how to write an excellent paper? The following is my discussion on the quality characteristics and reliability of accounting information, hoping to help you.

abstract

The quality characteristics of accounting information are an important part of modern accounting theory system, which has a close internal logical relationship with accounting objectives. Constructing a systematic and perfect accounting information quality characteristic system is not only conducive to the further development and perfection of accounting theory, but also of great significance to comprehensively and effectively improve the quality level of accounting information and curb the increasingly serious distortion of accounting information. Based on the research results at home and abroad, combined with China's accounting environment and existing principles, this paper puts forward the construction idea of accounting information quality characteristic system.

key word

The information quality characteristics of financial reports are the bridge between financial accounting objectives and financial reports. It serves the goal of financial report, constrains the information provided by financial report, and is also the standard to measure the quality of financial report. FASB puts forward that "the primary quality of accounting information is relevance and reliability. Accounting information must have these two main qualities in order to be useful for the decision-making of report users. " Therefore, this paper mainly discusses correlation and reliability.

I. Relevance and reliability

1. correlation

Relevance means that the accounting information provided by the accounting information system should be related to the user's decision. In order to meet the requirements of relevance, enterprises should consider the different information needs of users of financial statements when dealing with accounting information, but this does not mean that accounting information must meet the needs of all accounting information users. In fact, fundamentally speaking, the accounting information provided by enterprises can only be a kind of general accounting information, which is provided on the basis of considering the needs of all accounting information users. Different users need to properly analyze, sort out and understand the general accounting information provided by enterprises when making decisions.

To make accounting information relevant, we must meet three basic quality characteristics: predictive value, feedback value and timeliness. Predictive value means that accounting information can help investors predict the financial situation, operating results and cash flow of enterprises, because investors' decisions are future-oriented; Feedback value means that investors can correct their previous understanding after obtaining accounting information; The timeliness of accounting information requires the timely collection, processing and processing of accounting information in order to transmit accounting information in time. It is useless that accounting information is not timely.

2. Reliability

Reliability means that accounting information is not affected by errors or deviations, and can truly reflect what it intends to reflect. Reliability includes fair disclosure, neutrality, honesty and prudence. The so-called fair disclosure is objectivity, that is, accounting information should be based on actual economic activities and can objectively express the financial situation, operating results and cash flow of enterprises; The so-called neutrality requires accountants to maintain a fair and neutral attitude when dealing with accounting information; The so-called completeness means that the accounting information reflected in the enterprise's financial statements can fully reflect the financial situation of the enterprise at a specific time, the operating results and cash flow during a specific period, and the digital calculation is accurate; The so-called prudence or conservatism means that when there are several alternative methods, the enterprise should choose a method that neither overestimates the income and assets of the enterprise nor underestimates the liabilities and expenses of the enterprise to ensure that the net assets of the enterprise are not overestimated and the profits are not inflated.

3. Relationship between Relevance and Reliability

(1) Two representative views

① The SFAC of the United States puts relevance and reliability together, but it is not difficult to find that it is more inclined to "relevance" by analyzing a series of documents on financial reporting reform in the United States.

(2) The Statement of Principles for Financial Reporting in the United Kingdom holds that the reliability of accounting information takes precedence over the relevance before the basic reliability is met, and accounting information disclosure should select the most relevant information from the reliable information set.

Ge Jiashu (1999) also believes that reliability is the essential attribute of financial accounting and the soul of accounting information. In the accounting information quality system, reliability is the foundation and core, even in the case of more and more fair value applications.

(2) Relevance and reliability-dilemma.

Correlation and reliability are closely related. Without reliability, there can be no relevance or reliability. They always affect or determine the usefulness of information at the same time.

Second, the information quality constraints and constraints

1. Cost-effectiveness principle

The principle of cost-benefit refers to the benefits brought by an enterprise providing an accounting information. The cost of providing accounting information should be compared, and only the income is greater than the cost is worth providing accounting information.

2. Principle of materiality

The principle of importance means that enterprises should distinguish the importance of economic activities in the process of accounting and providing accounting information, so as to adopt different accounting treatment methods, success degrees and different accounting disclosure policies. Important economic business should be reflected separately and highlighted through accounting information; Consolidate and reflect unimportant accounting information.

Third, the characteristics of information quality of financial reports in China

According to the newly revised Accounting Standards for Business Enterprises-Basic Standards issued on February 15, 2006, China's "accounting information quality requirements" include objectivity, relevance, clarity, comparability, substance over form, importance, caution and timeliness. This shows that:

(1) Objectivity is the highest quality feature of accounting information. Objectivity means that accounting information must be based on the actual economic business and legal documents that prove the occurrence of economic business, truthfully reflect the financial situation and operating results of the enterprise, and achieve true content, accurate figures and reliable information, which is the basic premise to prevent accounting information from being distorted.

(2) Relevance is the main quality feature of accounting information. Relevance means that accounting information must be related to users' decisions and have the ability to influence decisions; Here, the combination of objectivity and relevance of accounting information can coordinate the contradiction between reliability and relevance in traditional views.

(3) Clarity, comparability and timeliness are the secondary quality characteristics of accounting information. Clarity means that accounting information must be concise, easy to understand, accurate and clear, which can simply and clearly reflect the financial situation and operating results of enterprises and be easily understood by people; Comparability shows that alternative accounting schemes should be reduced as much as possible; Timeliness means that any information must be provided before decision-making, otherwise it will become useless information.

(4) Substance over form, prudence and importance are the prerequisites for the usefulness of accounting information quality. Substance is more important than form, which means that the report of a transaction or event must reflect its economic essence rather than its legal form, leading to misreporting and underreporting; Caution refers to exaggerating possible losses rather than possible gains under the premise that standards and systems allow choices; Importance means that it is not insignificant to decision-making. Because correlation includes: predicted value, feedback value and timeliness; Reliability includes fair disclosure (including objectivity and clarity), neutrality, integrity and prudence. It can be seen that the main characteristics of the information quality of financial reports in China are reliability, relevance and reliability, which shows that information must be true and fair; Relevance means that information must lead to differences in decision making; Importance is the premise of usefulness, and the benefit is greater than the cost, which is the constraint condition of selecting information. Therefore, this paper holds that reliability and relevance are not irreconcilable contradictions. When the accounting information provided by a method is not equivalent in reliability and relevance, our choice should be: choose the most relevant information on the premise of reliability. Relevance can be regarded as a comprehensive overall quality standard, reliability as the primary quality standard, relevance as the guidance and reliability as the guarantee of relevance, so as to realize the harmonious unity of relevance and reliability and break the contradictory situation between them.

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