Qualitative Characteristics of Accounting Information

Reliability: It is the ability of a user to depend on the information provided by an organization. Accounting information can be stated as reliable if it is free from errors any kind of personal bias. In other words, the information provided by an organization must be verifiable and based on proper facts.
Relevance: It is the ability of information to meet the users’ needs and help them make important decisions. The information provided by the organization must be available to the users on time and hence, help them in forecasting.
Understandability: It means presenting the accounting information of an organization in a way that the users can understand it in the same sense as the organization wants to convey. With proper understandability only, an organization can communicate effectively with the different users of accounting information.
Comparability: Relevance and Reliability of the accounting information is not enough; it should also be comparable. It means that the organization should use the same measures of reporting and accounting principles, so the users can effectively compare the current year’s reports with the previous years’.

Introduction to Accounting