Vous êtes sur la page 1sur 3

DQ6.1, DQ6.

17,
P6.6, P6.24
1. What are the fundamental qualitative characteristics of useful
financial information and what are the enhancing characteristics?
Fundamental
Relevance
Faithful representation
Enhancing
Comparability
Verifiability
Timeliness
Understandability
17.
Auditors play an important role in the financial reporting
system, and their independence from their clients is an essential
feature of this system. Why is such independence considered
necessary? Why is it difficult to maintain?
Independence is considered necessary as auditors are required to have a non
bias. The absence of independence may present issues in achieving the
fundamental qualitative characteristic of faithful representation as biases may
arise. This is difficult to maintain as relationships may form between colleagues
through close working together.
P6.6 Qualitative
1. Briefly describe the following characteristics of useful accounting
information:
a) Relevance
Accounting information should be useful to individuals/stakeholders in
decision making processes, specifically it should assist in making,
rejecting or accepting predictions regarding an entity
b) Faithful representation
Financial information should be reliable, free from bias and error and
should not under or overstate the financial position of the entity be
reported on
c) Understandability
Statements and reports should be prepared with the audience of these
documents taken into consideration where varying degrees of
accounting knowledge may apply. These documents should be
prepared for an audience who have a reasonable level of accounting
knowledge (clear and concise)
d) Comparability
Statements should be prepared in a manner consistent with similar
companies so as to allow greater accuracy when comparing
performance or position of the entity
e) Timeliness
Information should be provided in a time frame acceptable to be
incorporated into user decisions
f) Verification
Figures/numbers in the statements should be verifiable by observation
or source documentation

2. For each of the following pairs of information characteristics, give


an example of a situation in which one of these characteristics
may be sacrificed in return for a gain in the other
a) Relevance and verification
Often obtaining documents needed to verify transactions take a
considerable amount of time where these transactions are highly
relevant to user decisions they should be included despite the absence
of verification

b) Faithful representation and timeliness


To secure faithful representation, greater care should be taken in ensuring
figures are correct and frequent evaluations of the processes being
undertaken should occur. This presents a trade-off as a higher level of
faithful representation is time consuming, compromising the timeliness
characteristic. Conversely, focusing solely on timeliness of reports or
statements may compromise the faithful representation of the entity as
less time is allocated to ensuring the preparation of such statements is
free from bias.
c) Comparability and relevance
Moving between types of reporting styles so as to improve relevance may
be a disadvantage to comparing statements/reports over the time period

d) Relevance and understandability

6.24 Ethics
From the following list:
a) Self interest
b) Self review
c) Advocacy
d) Familiarity
One
Two self review
Three self interest
Four Self interest

Vous aimerez peut-être aussi