10 Characteristics of Accounting Information

We explain what accounting information is and what it is used for. We also explain the main characteristics of this information.

What is accounting information?

Accounting information plays a key role, as it allows us to identify, record, measure, classify, analyze and evaluate in a systematic and orderly manner all operations or activities carried out in an organization. It is necessary for those who run the company and also for all those who in some way interact with the company from outside it.

On the other hand, It is a legal requirement to have all commercial data, to be able to present them if they are requested by any competent authority (for example, for a tax inspection). In addition to the management or the board itself, the users of accounting information can be unions, suppliers, investors, inspection bodies, creditors, banks, etc.

See also: Financial information.

Characteristics of accounting information:

  1. Utility

Accounting information must be useful, in principle, to know the real financial situation of a business. Knowing the financial statements can be a valuable element for decision making. To be useful, the accounting information must meet the requirements mentioned below.

  1. Relevance

Accounting information must be consistent with the objectives and needs of those who will use it.

  1. Clarity

Accounting information should be easy to understand, It must be written in a clear and organized mannerwithout too many technicalities, to be accessible even to people who are not experts in accounting topics.

You may be interested in: Balance sheet.

  1. Comparability

The information must have the possibility of being compared with that of other companies or with that same company in other time periods.

  1. Chance

Information must be provided in a timely manneras well as in an appropriate place; sometimes special meetings are held to present accounting information, for example, to a company’s board of directors.

  1. Objectivity

accounting information It must be prepared without any type of prejudice or preconceptionyou simply have to state the facts as they are. It is unethical to “paint” a different picture than the real one in order to influence the users of that information in a certain direction.

  1. Reliability

Information It must allow users to depend on it when making their decisionsthat is, it must be reliable information, for which it is necessary that it also meets the requirements of verifiability and representativeness.

  • Verifiability. The information must be able to be corroborated by people other than those who provided it.
  • Representativeness. The information should cover the whole, not just a specific part, as this could lead to an unrealistic idea of ​​the financial situation. The more precise it is, the more representative it will be.

  1. Integrity

In accounting information information should not be “cut”there must be no omissions, everything must be included in order to achieve a faithful representation of the accounting situation.

  1. Certainty

There must be security regarding the data provided, absolutely everything must be checkednever rely only on what another communicates, as there may be involuntary errors.

See also: Financial statements.

  1. Prudence

Uncertainties and risks must always be present when an accounting report is prepared, so estimates must be very cautious. They are sources of uncertainties, for example, the collectibility of doubtful accounts or the useful life of fixed assets.

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