ACC 220 Week 3: Analysis of Financial Reporting and Its Impact on Business Decision-Making

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ACC 220 Week 3: Analysis of Financial Reporting and Its Impact on Business Decision - Making ACC 220 Week 3 DQ 1 and DQ 2 Help Needed Discussion Questions Q1. - When reviewing a financial report, why must information be reliable, relevant, consistent, and comparable? Why are these accounting characteristics important? What kinds of problems might result if a financial report is not reliable, relevant, consistent, or comparable? Answer – The financial reports must be reliable, relevant, consistent and comparable because these reports play very important role in interpretations and framework for the preparation and presen tation of financial statements and t he objective of financial statement is to provide information about the financial position, performance and changes in the financial position of an entity. It should also provide the current financial status of the entity to all the users of financial information. Reliable : - For reporting to be reliable, the stated information should be verifiable, free from bias, and comprehensive, ensuring that nothing material relative to underlying events and conditions has been intentionally omitted or that nothing has been included that would likely cause the information to be misleading to the user. Relevant: - For reporting to be relevant, a logical relationship must exist between the information provided and its intended use. Information is relevant if it impacts a user’s
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