ACC 220 WEEK 3 DQ 1 - inaccurate information can lead to...

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Week 3 Discussion Question 1 Due Date: Day 2 [Main] forum Post your response to the following: o When reviewing a financial report, why should information be reliable, relevant, consistent, and comparable? o In other words, why are these accounting characteristics important? o What kinds of problems could be created if a financial report is not reliable, relevant, consistent, or comparable?
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The basic purpose of a financial statement is to provide information about the company/entitiy's performance and or financial stability/wellbeing. Financial statements are used by many for a variet of reasons. At a management level financial statements would be used for making business decisions, that relate to the basic operation of the company, realizing budgetary constraints etc. Poor or
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Unformatted text preview: inaccurate information can lead to making a misinformed decision to the detriment of the company. Investors often look at fianacial statements in order to acsess the financial health of a company, to decide whether they wish to invest. it a good risk? Is the question that has to be asked. Financial institutions look at financial statements similarly, in deciding whether to lend working capital etc. Prime example would be Enron. Their financial statements looked perfect on paper, however the information contained in the reports was not accurate, as such they had no money. Many people lost jobs, retirement, cash etc....
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ACC 220 WEEK 3 DQ 1 - inaccurate information can lead to...

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