Enhancing Qualities of Accounting Information: Comparability, Verifiability, Understandability
VerifiedAI Summary
Comparability enables financial readers to compare the differences and similarities with the financial reporting entity. It enriches a firm’s information environment so that users can identify trends in economic performance and approach more relevant peer and overall industry information.Verifiability provides assurance that the information faithfully represents what it purports to be representing. It helps to assure users that the financial reports are accurate and fair representations of the transaction. Verifiability facilitates the users in their assessment of its reliability.Understandability is the degree to which information is easily understood. Understandability in accounting will help to enhance the understandability of various components for users. This is only solved when the material is classified, clearly represent, and concise.