Reliability Principle
The quality ensuring financial information is verifiable, neutral, and faithfully represents what it claims to represent, making it dependable for decision-making.
Reliability Principle
The accounting principle requiring financial information to be verifiable, neutral, and faithfully represented, ensuring that users can depend on it to make economic decisions.
For instance, an auditor verifies inventory quantities and values through physical counts and price testing, ensuring that the inventory figures on the balance sheet reliably represent what the company actually owns.
Reliable information is free from material error and bias, and faithfully represents the economic substance of transactions. While absolute reliability is impossible due to inherent limitations in measurement and estimation, accountants apply professional standards to maximize the trustworthiness of financial information.