Experimental Analysis on the Relationship between Two Primary Qualities of Useful Information of Relevance and Reliability

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pISSN : 1975-7700 / eISSN : 2734-0570

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Experimental Analysis on the Relationship between Two Primary Qualities of Useful Information of Relevance and Reliability

¹동서대학교
²부산대학교

ABSTRACT
열림/닫힘 버튼

Financial Accounting Concept identifies the overall objective of accounting as the provision of information that is useful for decision making. It also describes relevance and reliability as the two primary decision-specific qualities necessary for useful information. There has traditionally been a presumption that there exists a trade-off relationship between relevance and reliability. This study was motivated by the desire to confirm the empirical validity of the trade-off assumption. We launched a questionnaire survey targeting 124 undergraduate students majoring in accounting in P university. The questionnaire was designed to make the respondents to choose between two accounting alternatives characterized by relevance or reliability in 10 hypothetical transaction scenarios. The analysis of the responses suggested a direct, not a trade-off, relationship between the two qualities, which was more evident for the group of students with a lesser exposure to accounting education or training. This study provides an opportunity to reconsider the meaning of qualities of accounting information in general and the relationship between the relevance and reliability in particular.
KEYWORDS
열림/닫힘 버튼

qualitative characteristics, relevance, reliability, trade-off relationship, questionnaire-based experimental research

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