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Qualitative characteristics of accounting information, explained by our business accountant in Sydney

Accounting is the process of recognizing, measuring, and communicating economic information to allow informed judgments and decisions. Put more simply, accounting is the “language of business”. Our business accountant in Sydney has detailed a few important accounting terms and their ramifications on the accounting environment.

Relevance
This is the capacity for accounting information to make a difference in decisions. Our small business accountants in Zetland believe that information should have a predictive value or be from a certain time period

Reliability
The extent to which accounting information can be depended and relied upon to represent it is supposed to present. This means information should be free from error, have a faithful representation and be neutral.

Comparability
Our small business accountant in Sydney identifies comparability as the ability to use information to compare or contrast the financial activities of different companies. It is important that business accountants in Zetland reveal the accounting methods used so that comparisons across companies can be made.

Consistency
As accounting information from different times must be comparable from a company, accountants must use the same accounting methods year to year, unless they disclose a change in methods.

For more qualitative characteristics of accounting information, please contact our business accountant in Sydney today.