The primary characteristics of Financial Accounting

Financial Accounting
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Financial Accounting
The primary characteristics that guarantee sensible decision-making in finance are relevance, reliability, and consistency. Notably, the financial reports should be relevant, reliable, and consistent. Relevance is an important measure that affirms the quality of financial reports. According to the Financial Accounting Standards Board, relevant financial data must offer individuals ability to understand past occurrences, the present happenings, and forecast future performances. Moreover, relevant information must also validate or correct certain expectations (Hermanson, Ivancevich, & Edwards, 2018). There are numerous components of relevant financial information. The elements include predictive value that ascertains its validity in predicting future events. Confirmatory value is also useful in validating its accuracy in keeping past events.
Financial information is relevant when it assists analyze past events and effectively predict future events. For inst...