by D. Victor

Created on: November 11, 2009   Last Updated: November 30, 2010

Accounting involves the process of transforming data about an organisation's operations into information that various stakeholders can use for myriad reasons. However, accounting requires the production of good information according to specific standards. Good information possesses a significant number of ten characteristics.

1) Completeness

Good accounting information is complete. This means that it provides intended users with all the information that is necessary to fulfil their information needs and requirements. Completeness also suggests that all necessary information is included in any report that the organisation produces. The assumption is that there would be no error of omission in the information.

2) Relevance

There is always an objective to be fulfilled when accounting information is required. For accounting information to be valuable, it should be relevant to the objective and the intended user. An analysis of the prime cost of a project should not include information on indirect costs, for example. It is important that any figures or reports should stick to the point and not provide more information than is necessary. Irrelevant information wastes time and can increase the cost of information production.

3) Accuracy

It is almost self-evident that accounting information should be accurate. This does not suggest that you must always state figures and facts down to the last penny or detail. What it means is that information should be accurate enough for its intended purpose (or user), without being unnecessarily detailed. Inaccurate information cannot provide a valid representation of reality and can limit the effectiveness or worth of decisions based on it.

4) Clarity

It is useless to have accurate, timely and complete information if it is not clear to the user of the information. The ability of the user to understand and properly comprehend the information is critical. This is another reason why accounting standards are created and enforced.

5) Properly communicated

It is necessary for organisations to monitor activities and accounting information is useful in so doing. However, good information is properly communicated to those who need it. Accounting departments should not merely create required reports but communicate them to information users in manner that increases the value of the information.

6) Timely

Since information has an objective, there are usually periods within which these objectives operate. Good information neither is produced

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