| The need for good accounting information is not | | | | must satisfy information users and stakeholders |
| separable from an organisation's purpose or | | | | and give confidence in decisions made based on |
| objectives. Since organisations are purposeful, it is | | | | that decision. For example, if a club wants to |
| natural that members of the organisation want to | | | | establish what its subscription fees should be, it |
| ensure that they are meeting stated objectives. | | | | should have a valid and reliable account of its |
| It does not matter whether the organisation is a | | | | operating expenses. |
| commercial/ non-profit organisation, government | | | | Internal or external users might also take a longer |
| agency or non-governmental organisation (NGO). | | | | time to process information that lacks clarity. In |
| Good info is necessary to help any organisation | | | | addition, such information may actually mislead the |
| properly fulfill its purpose. | | | | user or stakeholder, making it important to pay |
| Accounting information helps an organisation | | | | attention to the format and presentation of |
| achieve its objectives in three main ways: | | | | accounting information. This is even if the |
| decision-making, planning and reporting of activities. | | | | information is for informal purposes. |
| Although, many believe that accounting is just | | | | A combination of relevant and irrelevant |
| about figures and number crunching, useful info | | | | information can lead to information overload. It |
| extends to non-financial info as well. The | | | | can also delay cognitive processing, apart from |
| combination of financial and non-financial data helps | | | | increasing the cost of producing documents or |
| with the management of any organisation. | | | | reports. Good accounting information, on the |
| You can glean the importance of good accounting | | | | other hand, makes processing more efficient and |
| information by assessing the impact of bad | | | | decreases the cost of its production. In a similar |
| accounting information as well. Several critical | | | | manner, timely information is more worthwhile |
| characteristics define what good information is: | | | | and valuable than those that reach the intended |
| accuracy, clarity, relevance, timeliness and | | | | user later. Completeness, another qualitative |
| completeness are the most important | | | | characteristic, can help you to establish a true and |
| characteristics. Information that does not possess | | | | proper picture of a transaction, event or entity. |
| these characteristics would not be able to satisfy | | | | In a nutshell, good accounting information is |
| the purpose for which it is needed. | | | | important because they help organisations and |
| Accounting information that is inaccurate | | | | persons fulfill objectives and accomplish tasks. It |
| (according to context) cannot reflect the true | | | | does this by providing users with complete and |
| financial position of an organisation or activity for | | | | accurate information at the right time, in the right |
| various information users. For it to be accurate, it | | | | format and for the intended purpose. |