ACCA MA Management Accounting

Qualities of Good Information

Qualities of Good Information
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Data vs Information


“Raw facts and figures constitute DATA”. As the data in not arranged in some standard form so it doesn’t give any meaning to its user. For proper understanding, data needs to be arranged in some meaning full form so that it can be useful to users. Arranged data is called information.

For example raw data of debtors, creditors and others do not help accountant but when it is arranged in form of the income statement or balance sheet,it gives proper meaning and help accountant in interpretation.

Qualities of Good Information


Qualified of good information can be summarized using the mnemonic “ACCURATE”

  • Accurate- information should be correct in all means so that it can prove beneficial to the user
  • Complete- completion of information should be insured before a presentation. Incomplete information result in wrong decisions
  • Cost benefits- information is only beneficial if benefit associated with it exceeds cost incurred to obtain it
  • User understanding- information should be presented in way which understandable for user. For example if users cannot understand technical information, it must be presented using simple ways
  • Relevant- information is only beneficial for the user if it is relevant for the user. For example  information containing medical terminologies is irrelevant for accountant
  • Authority- authority of information adds to its credibility ,so it should be delivered by person having authority or expertise in that area. For an accounting information will create more impact to students if it was delivered by expert accountant
  • Timely- timely presentation of information helps in achievement of desired results
  • Ease of use- use the documents easy to use for user . e.g statement of financial position presented in standard format is more to use for receiver