Meaning of reliability of accounting information

Question 1: Definition of Reliability of Accounting Information The U.S. Financial Accounting Standards Board defines reliability as "Reliability means that users of information can trust the information provided. Accounting information can be considered reliable only if it reflects what it is intended to reflect, presents actual economic activities and results without bias, and neither favors a predetermined outcome nor appeals to the needs of a particular interest group. It can withstand validation and verification in order to be considered reliable." In this definition, reliability includes three components: truthfulness of reflection, verifiability and neutrality. Compared to the definition of reliability in IAS, this definition emphasizes two points. One is that reliable information must be trustworthy to the information users; the other is that reliable information must be verifiable. The book Accounting Dictionary Volume 1: Accounting Theory, edited by Ge Jiashu and Yu Xuyao, defines reliability as follows: "Reliability means that the information reflected in the financial statements is sufficiently trustworthy. Specifically, for a rational person who has sufficient understanding of the accounting information to be able to make reasonable decisions based on that information. In this way, we can consider the information to be reliable." This definition, compared with the previous two, highlights two points: firstly, whether information is reliable or not is for a rational person who has the ability to understand the information adequately, not for all people; secondly, reliable information must enable the information user to make a reasonable decision. From this, we can see that the reliability of accounting information should be defined from two aspects, that is, from the point of view of the information provider, from the point of view of the accountants, they must abide by the accounting laws and regulations, follow the principles of accounting, and provide true and fair accounting information as far as possible in accordance with certain accounting procedures and methods; and from the point of view of the information users, the information provided must be trustworthy for the users of the information, and they can feel assured that the information can be used for The information provided must be trustworthy to the information user and can be used with confidence for investment, credit and other decision-making purposes.

Question 2: What is meant by reliability and relevance of accounting information? Relevance and reliability are united at some levels, but contradictory and antagonistic at others

[Abstract] Relevance and reliability are the two main qualitative characteristics of accounting information, and the trade-off between them is the most useful information for the users of accounting information. Relevance and reliability are united at some levels, while there are contradictions and confrontations at other levels. As the economy develops and the number of information stakeholders increases, standard-setting bodies are forced to make trade-offs between relevance and reliability in order to decide which information an enterprise should choose to disclose to the public and in what way.

[Keywords] Accounting Information Reliability Relevance

The goal of financial accounting is to provide stakeholders with decision-useful information, including the results of business operations, cash flows and changes in owners' equity. Traditional financial accounting is characterized by a historical picture of economic activity and its results, which is formed by past transactions and events.

First, the meaning of the relevance and reliability of accounting information

The economic activities of the enterprise are varied, and the enterprise should choose to record the matters that are relevant to the users of the information. The U.S. Financial Accounting Standards Board (FASB) in the publication of the financial accounting concepts statement that "the objective of financial reporting should be broadly focused on providing information that is useful to current and potential investors, creditors, and other users in making sound investment, credit, and similar decisions." Different users focus on the enterprise from different perspectives, and the same information has different values for different users. Under the principle of cost-effectiveness, the information provided by the enterprise is only to meet the information needs in a general sense, which requires information users to analyze the information provided by the enterprise, filtering and even reorganization, in order to achieve the purpose of their own use of information.

Second, the role of relevance and reliability and interrelationship

Relevance and reliability as the two quality characteristics of accounting information, are useful for decision-making ***. Relevance has two basic signs: predictive value, feedback value [2]. Predictive value can help information users to evaluate the past, present and future matters, through the analysis of their interrelationships to predict the future development trend of economic affairs; feedback value is reflected in the previous evaluation and prediction of the results to be confirmed or corrected, so that the user of information to maintain or change the previous decision.

Accounting documents are the most primitive records of economic activities. From the accounting vouchers to the books of processing conversion, so that the accounting information recorded by the enterprise closer to the real economic activities of the enterprise. Because it puts the individual, local records as a whole, comprehensive and systematic description [3]. The realization of this effect depends on the application of the principle of reliability. If the loss of truth and fairness, the original appearance of the enterprise's economic activities will certainly be distorted.

In general, relevance and reliability are harmonized. Information that is useful to stakeholders can only be reliable to help them make decisions, and true and reliable information is only relevant to decision-making needs to be truly valuable. The reason why people try to improve the reliability of accounting information through standards, laws, and the review and supervision of the relevant departments is that accounting information has relevance.

However, relevance and reliability do not always affect usefulness in the same direction. There is information that is highly relevant but whose elements cannot be accurately identified under existing conditions, and there is information that is highly reliable but of little interest to external users of information. The contradiction between relevance and reliability can be analyzed from the following two aspects:

Reliability is affected by relevance in the processing of accounting information. From the original documents to the books, accountants will be based on their own subjective judgment of the relevance of the original information to give different degrees of importance, while affecting its depreciation, impairment provisions and other items of the projections and estimates. Different standards of relevance judgment, the same accounting information processing results will be different, and thus present the face of economic activity and the real situation between the distance will arise.

Excessive pursuit of relevance can be detrimental to reliability. Timeliness is the soul of relevance[4]. In the ever-changing economic environment, timely access to information, rapid response has become an important condition for winning in economic activities. The value of relevant information to decision makers will be greatly reduced if it loses its timeliness. However, in order to capture information in a timely manner, companies are very likely to be in the absence of objective, verifiable data before the accounting process, which forecasts, estimates of the components of the inevitable damage to the reliability of accounting information.

The pursuit of reliability of accounting information also needs a limit. Overly precise information not only leads to a surge in transaction costs, but also has the potential for error. The general standard of reliability is compliance with the accounting system ...... >>

Question 3: The Meaning of Accounting Information Quality The quality of accounting information is the sum of the characteristics of the ability of accounting information to meet explicit and implicit needs

Reliability. Reliability requires that enterprises should be based on the actual occurrence of transactions or events for the recognition, measurement and reporting, faithfully reflecting the recognition and measurement requirements of the accounting elements and other relevant information to ensure that the accounting information is true and reliable, and Danyuan integrity.

Relevance. Relevance requires that the accounting information provided by the enterprise should be relevant to the economic decision-making needs of investors and other users of financial reports, to help investors and other users of financial reports on the enterprise's past, present or future situation to make an evaluation or prediction.

ClarityClearness (comprehensibility) requires that the accounting information provided by the enterprise should be clear and easy for investors and other users of financial reports to understand and use.

Comparability. Comparability requires enterprises to provide accounting information should be comparable. This mainly includes two meanings:

(a) the same enterprise in different periods of comparable

(b) different enterprises in the same accounting period comparable

Importance. Materiality requires that the accounting information provided by the enterprise should reflect all significant transactions or events related to the enterprise's financial position, results of operations and cash flows.

Prudence. Prudence requires that an enterprise should exercise due care in recognizing, measuring, and reporting transactions or events, and should not overstate assets or revenues, or understate liabilities or expenses.

Timeliness. Timeliness requires that an enterprise should recognize, measure, and report a transaction or event that has already occurred in a timely manner, not earlier or later.

Question 4: What is the difference between reliability and truthfulness of accounting information? The IAS criterion for determining reliability is: "Information is reliable when it is free from material error or bias and when it faithfully reflects what it is intended to reflect or should reflect for the user's information." "No material errors" means technical correctness; "no bias" means neutrality in position; "faithfully reflect" means truthfulness in results.

The reliability of accounting information requires that enterprises should recognize, measure and report on the basis of transactions or events that actually occur. To faithfully reflect the recognition and measurement requirements of the accounting elements and other relevant information to ensure that the accounting information is true, reliable and complete. Accounting information to be useful, must be based on reliable, if the accounting information provided by the financial report is unreliable, will give investors and other users of decision-making misleading and even loss.

Question 5: the meaning of the authenticity of accounting information The so-called authenticity of accounting information refers to the authenticity of accounting information, objectively reflecting the economic activities, accurately revealing the economic activities contained in the economic content. It can be said that authenticity is the life of accounting information, without authenticity, the relevance of accounting information should be weakened, and serious harm to the community and the general public, damaging the interests of the majority of stakeholders

Question 6: What are the requirements for the quality of accounting information? What is the meaning of each Accounting information quality requirements are the basic requirements for the quality of accounting information provided in the financial reports of enterprises, is to make the accounting information provided in the financial reports of investors and other information users should have the basic characteristics of decision-making, which mainly includes reliability, relevance, understandability, comparability, substance over form, importance, prudence and timeliness.

Reliability: Reliability requires that enterprises should recognize, measure, and report on the basis of transactions or events that actually occur, faithfully reflecting the recognition and measurement requirements of the accounting elements and other relevant information to ensure that accounting information is true, reliable, and complete.

Relevance: Relevance requires that the accounting information provided by the enterprise should be relevant to the economic decision-making needs of investors and other users of the financial report, and help investors and other users of the financial report on the enterprise's past, present or future situation to make an evaluation or forecast.

Understandability: Understandability requires that the accounting information provided by the enterprise should be clear and easy for investors and other users of financial reports to understand and use.

Comparability: Comparability requires that the accounting information provided by the enterprise should be comparable.

Substance over form: Substance over form requires that an enterprise should recognize, measure, and report accounting in accordance with the economic substance of the transaction or event, not just the legal form of the transaction or event.

Materiality: Materiality requires that the accounting information provided by an enterprise should reflect all material transactions or events relating to the enterprise's financial position, results of operations and cash flows.

Prudence: Prudence requires that an enterprise should exercise due care in recognizing, measuring, and reporting transactions or events, and should not overstate assets or revenues, or understate liabilities or expenses.

Timeliness: Timeliness requires that an enterprise should recognize, measure and report transactions or events that have already occurred in a timely manner and not earlier or later.

Question 7: What is the relevance and reliability of accounting information? 10 marks l. Relevance. According to the International Accounting Standards Committee (lASC) and the U.S. Financial Accounting Standards Board (FASB) definition, relevance includes the following meanings: ① information associated with the user's decision-making, and has the ability to influence the user's economic decisions. ② The role of information in decision-making refers to the input of relevant information into the forecasting process, thereby enhancing the decision-maker's ability to forecast and confirming or correcting past evaluations. ③ The usefulness of information for decision-making must be provided to decision-makers in a timely manner before the information loses its decision-making role, otherwise the relevant information also becomes irrelevant. In our country, it is only stipulated in Article 14 of the Accounting Standards for Business Enterprises that accounting should be carried out in a timely manner. In contrast, it can be said that the relevance of accounting information this floating quality characteristics in our country is missing, at least can be said to be incomplete.

2. Reliability. According to the definition of the IASC phase FASB, reliability should include such layers of meaning: ① information must faithfully reflect its "intended to reflect or should be reflected" transactions. Information must be unbiased. Unbiased means that the information must be neutral. (iii) The information must be free from material error. In comparison, Article 10 of China's Accounting Standards for Business Enterprises stipulates that accounting should be based on the actual occurrence of economic operations, and faithfully reflect the financial position and operating results. Here the concept of reliability is too thin, only "faithfully reflect" can not express the full meaning of the quality characteristics of reliability.

Question 8: What does reliability mean? Products, systems in the specified conditions, the specified time, the ability to complete the specified function is called reliability.

The product here can refer to any system, equipment and components. The elements of the definition of product reliability are three "provisions": "prescribed conditions", "prescribed time" and "prescribed function".

-

-

The reliability of a product is defined in terms of three "rules": "specified conditions," "specified time," and "specified function.

-

-

-

Please adopt

Question 9: What is meant by the authenticity of accounting information The authenticity of accounting information, also known as objectivity, refers to the fact that accounting must be based on the actual occurrence of the economic operations and the legal documents proving that the economic operations took place, and faithfully reflect the financial position and operating results.

Question 10: the significance of accounting informatization Although accounting informatization in China has not been proposed for a long time, the nature and connotation of its further study, but it is undeniable that, with the arrival of the information society, accounting informatization will be an inexorable and inevitable trend of accounting informatization of the current accounting in theory or in practice will have a great impact. First of all, after the realization of accounting informatization, the accounting information system will really become a subsystem of the enterprise management information system. Businesses occurring in the enterprise, can automatically from the enterprise's internal and external collection of relevant accounting information, and brought together with the enterprise's internal accounting information system for real-time processing. Accounting will be freed from the traditional limitations of bookkeeping and accounting, so as to give greater play to the management and control functions of accounting, so that business operators and information users can always use the enterprise's accounting information to make reasonable predictions about the future financial situation of the enterprise, and make the right decisions for the management and development of the enterprise. Secondly, for the accounting assumptions, especially the traditional accounting subject is no longer have real capital and plant enterprises, it will also include some online virtual companies and network companies, these companies in order to *** with the same goal, will be combined together in a short period of time, when the completion of a specific goal will be dissolved very quickly, it's going concern, the basic premise of the accounting staging and currency measurement will be impacted. After the realization of accounting informatization, the enterprise network is interconnected with the external network, and users of accounting information can obtain relevant accounting information at any time. Secondly, due to the comprehensive application of information technology, the timeliness of information has been greatly improved, the predictive and feedback value of information has been greatly increased, and the flow rate of information has been greatly accelerated, which favorably contributes to the improvement of the level of economic management. In addition, through the accounting information system to directly obtain relevant data and analyze, reduce the human fraud phenomenon, thereby also greatly improving the reliability of accounting information and the quality of information. Thirdly, the processing flow of today's accounting software is still basically designed to simulate the processing flow of manual accounting. After the realization of accounting informatization, accounting is no longer an isolated system, but with a real-time processing, highly automated system, which is connected to other business systems and the outside world, and can read data directly from other systems and carry out a series of processing, processing, storage and transmission. Accounting reports can also be used to report electronically in real time, the user can always access to useful accounting information for decision-making, improve efficiency and promote the development of the economy. 21st century will be a society of information technology, today's society is moving towards the "knowledge economy" era, in today's competitive environment, accounting personnel not only need to know more about accounting, but also need to be more knowledgeable about accounting, so that the accounting profession is not only the most important thing to do, but also the most important thing to do. In today's competitive environment, accountants not only need to be well versed in the basic principles of accounting, mastering the technology of computerized accounting, but also need to learn some organizational concepts, behavioral factors, decision-making process and communication technology and other aspects of the basic theory. Accounting informatization represents a new accounting ideas and concepts, is a combination of traditional accounting theory and modern information technology, network technology and other products, is the inevitable trend of modern accounting development. People must seize the opportunity to meet the challenge, and strive to promote the development of accounting informatization in China.