I. POLÍTICAS
4. ANÁLISIS DE LA INFORMACIÓN
4.1 Cuestionario Estructurado con Docentes
A second major qualitative characteristic of useful information is reliability. Information is said to be reliable when users of the accounting information can rely or depend on this information to make good decisions with a degree of confidence. Inaccurate, inappropriate, biased or incomplete information that does not faithfully represent what it purports to represent, is considered unreliable information. Unreliable information will inhibit rather than enhance understanding, evaluation and decision- making by users and adversely affect the accountability of financial statements to
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stakeholders. This characteristic is particularly important and necessary for users who have neither the time nor the expertise to evaluate the veracity of information included in financial statements.The FASB Concepts Statement 2 states that, “The quality of reliability assures that information is reasonably free from error and bias, and faithfully represents what it purports to present (FASB, 1980, SFA C No. 2).” The Accounting Standards Board (1991) also emphasises that reliability is shown by the extent to which the information is error and bias-free and defines reliability in the following manner:
Information has the quality of reliability when it is free from material error and bias and can be depended upon by users to represent faithfully in terms of valid description that it either purports to represent or could reasonably be expected to represent (Para. 26).
The Statement of Principles lists some sub-criteria to judge if information in a financial report is reliable:
1. It can be depended upon by users to represent faithfully what it either purports to represent or could reasonably be expected to represent;
2. It is free from deliberate or systematic bias (it is neutral); 3. It is free from material error;
4. It is complete within the bounds of materiality;
5. In its preparation under conditions of uncertainty, a degree of caution has been applied in exercising judgement and making the necessary estimates.
Apart from these guidelines issued by the regulatory bodies, there has also been some academic research on the topic. Solomons et al,. (1989) point out that reliable accounting information has three characteristics:
a) Faithful representation, including completeness and substance over form b) Verifiability, including precision and uncertainty
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c) Neutrality, including freedom from bias, prudence, and conservatism.These characteristics can be explained in further detail to get a better understanding of the concept of reliability.
Faithful Representation: FASB Concepts Statement 2 states that “representational faithfulness is correspondence or agreement between a measure or description and the phenomenon it purports to represent (paragraph 63).” In accounting, reports need to provide information about economic resources and obligations and the transactions and events that change those resources and obligations. In paragraph 33, the IASB Framework states that an important responsibility of accounting professionals is to faithfully represent the transactions and events that have taken place and the change in the economic situation of the company due to them.The Canadian Institute of Chartered Accountants (CICA) also stresses the same point and states that, for information to be faithful in its representation, transactions and events affecting the entity must be presented in financial statements in a manner that is in agreement with the actual underlying transactions and events.
Verifiability: Verifiability is an essential component of reliability. Verifiability ensures that the data is reliable as it helps to provide a significant degree of assurance to a user that accounting measures essentially agree with or correspond to the economic things and events that they represent. The FASB emphasises how the accountants involved in a particular report deliberate with each other and produce a general agreement about the information presented. The FASB framework defines verifiability as “the ability through consensus among measurers to ensure that information represents what it purports to represent or that the chosen method of measurement has been used without error or bias.” In the academic literature on the topic, Carmichael et al,. (2007) state that the purpose of verification is to confirm the representational faithfulness of accounting information. Furthermore, they also stress that the key to assuring verifiability is to ascertain whether accounting measurements obtained by one measure can be confirmed or substantiated by having other measures measure the same phenomenon with essentially the same results.
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Neutrality: The third sub-criterion for a report to be reliable is that the information contained in financial statements is neutral. Accounting information is neutral when it is free from bias that would lead users towards making decisions that are influenced by the way the information is measured or presented. The FASB framework defines neutrality as “the absence in reported information of bias intended to attain a predetermined result or to induce a particular mode of behavior”. The condition of neutrality is a difficult standard to achieve as any human action is conditioned by subjective values and chance, but financial reporting can achieve this to some extent by reporting economic activity as faithfully as possible, without colouring the image it communicates for the purpose of influencing behaviour in some particular direction. Nikolai et al., (2009) argue that neutrality means that the financial report must not be carried out with a premeditated objective to influence the behaviour of its users.