,What is accounting ?
collecting analysing and
, communicating financial information .
The aim is to
provide information to make more informed decision .
of information?
Who are the users
accounting
→ accountant must be clear for whom the information is for
.
, Fundamental characteristics : .
Relevance : - A. I should capable be of influencing users decision .
the threshold of
It must cross
materiality it is
only considered
-
,
significant ,
if its omission would change the decision the users make .
Managers should consider how this information is
being used
by users .
Faithful representation : .
→ The information should be complete .
→ Information should be neutral .
→ Free from error .
→ Estimates (
accurately described & properly prepared )
Further
qualities : .
Comparability : .
of
→ Users
accounting seek to make comparisons .
→
Compare business overtime / to the other businesses .
→ Items that are alike should be treated in the same
way .
→ Users must be able to detect both similarities / differences in items .
Verifiability : .
→
provides assurance that A- I
provided faithfully portrays what it is
supposed to
portray .
Timeliness :
→ should be available in time for users to make decisions .
→
lack of timeliness undermines the usefulness of the information
,
.
collecting analysing and
, communicating financial information .
The aim is to
provide information to make more informed decision .
of information?
Who are the users
accounting
→ accountant must be clear for whom the information is for
.
, Fundamental characteristics : .
Relevance : - A. I should capable be of influencing users decision .
the threshold of
It must cross
materiality it is
only considered
-
,
significant ,
if its omission would change the decision the users make .
Managers should consider how this information is
being used
by users .
Faithful representation : .
→ The information should be complete .
→ Information should be neutral .
→ Free from error .
→ Estimates (
accurately described & properly prepared )
Further
qualities : .
Comparability : .
of
→ Users
accounting seek to make comparisons .
→
Compare business overtime / to the other businesses .
→ Items that are alike should be treated in the same
way .
→ Users must be able to detect both similarities / differences in items .
Verifiability : .
→
provides assurance that A- I
provided faithfully portrays what it is
supposed to
portray .
Timeliness :
→ should be available in time for users to make decisions .
→
lack of timeliness undermines the usefulness of the information
,
.
