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The Conceptual Framework for Financial Reporting defines the fundamental qualitative characteristics of financial information to be: [18] Relevance; and; Faithful representation; The Framework also describes the following enhancing qualitative characteristics: Comparability; Verifiability; Timeliness; Understandability
The following constraints have been identified for management accounting. The quantitative and qualitative characteristics of these constraints are meant to serve as controls or checks and balances when constructing a cost model or when using management accounting information.
Financial accounting is the preparation of financial statements that can be consumed by the public and the relevant stakeholders. Financial information would be useful to users if such qualitative characteristics are present. When producing financial statements, the following must comply: Fundamental Qualitative Characteristics:
Qualitative considerations of materiality are therefore different from in private-sector auditing, in which qualitative considerations are focused on the effect on earnings per share, executive bonuses or other risks that are not applicable to governments. Qualitative materiality refers to the nature of a transaction or amount and includes many ...
Accounting, also known as accountancy, is the process of recording and processing information about economic entities, such as businesses and corporations. [1] [2] Accounting measures the results of an organization's economic activities and conveys this information to a variety of stakeholders, including investors, creditors, management, and regulators. [3]
while financial accountancy information is computed by reference to general financial accounting standards, management accounting information is computed by reference to the needs of managers, often using management information systems. Focus: Financial accounting focuses on the company as a whole.
Financial statements are intended to be understandable by readers who have "a reasonable knowledge of business and economic activities and accounting and who are willing to study the information diligently." [2] Financial statements may be used by users for different purposes:
Accounting standards prescribe in considerable detail what accruals must be made, how the financial statements are to be presented, and what additional disclosures are required. Some important elements that accounting standards cover include identifying the exact entity which is reporting, discussing any "going concern" questions, specifying ...