What is the fundamental characteristics of financial reports?
1. Relevance: Financial reports should provide information that is relevant to users in making economic decisions and assessing the financial health of an organization.
2. Reliability: Financial reports should be trustworthy and accurate, based on verifiable data and unbiased information.
3. Comparability: Financial reports should be presented in a consistent format and structure, allowing users to compare financial information across different time periods and with other organizations.
4. Understandability: Financial reports should be presented in a clear and easily understandable manner, using plain language and avoiding overly technical jargon.
5. Timeliness: Financial reports should be prepared and issued in a timely manner to ensure that users have access to current and up-to-date financial information.
6. Materiality: Financial reports should include all material information that could affect the economic decisions of users, while avoiding unnecessary details that may obscure important information.