Qualitative Characteristics of Accounting Information and the Branches of Accounting

For accounting information to actually be useful to the people who read it, it must possess certain qualities. It is also useful to know that "accounting" is not a single, undivided activity — it has grown into distinct branches, each serving a different purpose.

Qualitative characteristics of accounting information

• Reliability — the information must be free from material error and bias, and must faithfully represent what it claims to represent, so that users can depend on it.
• Relevance — the information must be capable of influencing the decisions of its users; irrelevant data, however accurate, is of little use.
• Understandability — information must be presented clearly enough that a user with a reasonable knowledge of business and accounting can understand it.
• Comparability — information should be presented in a manner that allows it to be compared with the same business's figures for earlier periods, and (as far as possible) with other similar businesses.

Branches of Accounting