Related article Cost Accounting - Types, Example, Advantages, and More How to know if financial information is reliable? Accurate: Financial information must be completed and accurate.Completeness: All financial information, transactions, and event that should be included are including.Prudence: A high degree of caution must be taken into account when the assumption is required.Fair presentation: Financial statements must be prepared in the true and fair view.
Neutrality: Financial statements or information must be prepared free from any bias.Reliability Principle involved with the following accounting principle or concept:
The accounting transaction is considered to be reliable if it could assure the decision maker that the information captures the condition or events its purports to represent. This is really mean for all type of stakeholders that use financial information. Financial Statements must be true and fair and it is free from any kind of bias. Reliability Principle motivates integrity over financial reporting of an entity. This is how reliable evident from auditor’s perspective. Basically, the information in the financial statements is reliable if that information could be checked, reviewed, and verified by concerning person with objective evidence.įor example, the reliable evidence for financial transactions or event that records in financial statements is including original documents (invoices, contract, receipt, banks statements, etc), information that generates from the third party, or information that prepared by the auditor.
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