Evaluation Of The Relevance Reliability Comparability And Understandability Accounting Essay Example For Students

Evaluation Of The Relevance Reliability Comparability And Understandability Accounting Essay The intent of fiscal statements is to give fiscal statements information about the alteration in fiscal place, fiscal public presentation and fiscal place of the organisation. These can supply informations usage in determination devising such as investing, recognition and economic determination devising which are utile for assorted users. There are seven chief groups of users which are public, investors, loaners, employees, clients, supplies, authorities and other bureaus and the demands of information is different for each group, for case, employee will involvement on the profitableness, retirement benefits and employment chances and so on. Fiscal statement is supposed to relevant, dependable, apprehensible and comparable. In add-on, fiscal statement may include other information, for illustration, the uncertainnesss and hazards that influence the organisation. Outline1 Evaluation of the relevancy, dependability, comparison and comprehensibility2 Which one of the four qualitative features of fiscal information is the most of import?3 Decision Evaluation of the relevancy, dependability, comparison and comprehensibility Relevance is about the information that has the ability to act upon the economic determinations of users. There are two chief points relate to the relevancy which are prognostic value and collateral value. Predictive value can assist users to mensurate the yesteryear, nowadays or future public presentation. Confirmatory value can assist users to corroborate their past ratings. The one-year studies include ten-year statistics which have the recent ten-year figures. It includes net income and loss history, balance sheet and rider services figures and so on. It can assist the stockholders to corroborate the past ratings, step the past public presentation and compare the relevancy information at the same clip. The one-year studies embody a portion of operating web with future extensions. In this portion, the study has stated all belongingss that they are developing, building, planning and the belongingss that owned, developed and managed by them. It can assist us to foretell the present and future public presentation and verify the past ratings. In the one-year studies, we can happen the CEO s reappraisal of operations and mentality. This portion is the MTR s CEO taking about the MTR yesteryear public presentation which is good and which is bad, it besides mentions the following twelvemonth development of the MTR. It gives us a clear head about the MTR what will make during the following twelvemonth and briefly review the old twelvemonth public presentation. Dependability is about the information that is a complete and true representation. There are five major issues involve in dependability, free from material mistake, a faithful representation, impersonal, prudent and complete. MTR use one of the large 4 accounting company that is KPMG. KPMG is a big international company and has a batch of scrutinizing experience and professional staff. Therefore, stockholder can hold a great assurance on the fiscal statements. On the other manus, the audit study province that the KPMG give a true and just position that means the MTR studies are decently prepared with accounting criterions which means the studies are free from stuff, faithful representation, prudence and complete. Besides, the accounting house is an independent audit house which can carry through the point of impersonal. As a stockholder, we can hold a great assurance on that studies, because it is accuracy and do non hold any originative history. MTR is a public organisation and it is managed by authorities. It has been required a high transparence that revelation all information to public, such as, company policies, hence, their information must be faithful, impersonal, prudent and complete which are required by jurisprudence. So, their information has a high dependability. From the position of stockholders, we can swear on it. Domestication Of The Dog EssayWhich one of the four qualitative features of fiscal information is the most of import? In my sentiment, the dependability is the most of import qualitative feature. If the fiscal statements are non dependable, the stockholders will non hold any assurance on the MTR studies, because they feel that the fiscal statement information of the MTR is non faithfulness and truthfulness. Hence, they will non hold any involvement to recognize the MTR studies, so that the aim of fiscal statement is invalid. Even though the one-year studies has higher quality of relevancy, comparison and comprehensibility, but without dependability which will do the stockholders and possible investors run off. In the opposite side, if the fiscal statements have a higher grade of dependability, the stockholders will hold more assurance on the one-year studies, because higher grade of dependability means the one-year repot have meet the demands of free from material mistake, a faithful representation, impersonal, prudent and complete. When the studies meet those demands, it attracts the stockholders stay and attracts more investors. When seeing the MTR one-year studies, we can cognize that their studies have a good dependability. The MTR employ an external accounting house which is KPMG to scrutinize their accounting information, it fulfill the point of impersonal. The audit house besides give a true and just position to the MTR which means their information are faithful, complete, prudent and free signifier stuff mistake. From the above treatment, we can see that dependability is the most of import qualitative features in the fiscal statement. Decision During analysis the MTR one-year studies, I know that the four qualitative features have a great influence to stockholders. It has a important impact on the determination devising, because it can assist them to understand, recognize and construct up the assurance on the MTR studies. The four qualitative features besides affect the stockholders invest or non. In my sentiment, the dependability is the most of import qualitative feature, it represents faithfulness and truthfulness. Shareholder will depend on it to make up ones mind whether those accounting information can swear or non, thereby to be aftering the investing determination. Word Count: 1553 words