 |
| Source: Objectivity Principle |
Objectivity Principle was set in place to ensure that
accounting and financial information are accurate and unbiased. In other words,
financial statements need to be based on physical evidence rather than person opinions.
Certain decisions do require personal opinion, but with the objectivity
principle, the majority of the accountant’s analysis should not be based on
opinion.
If an accountant has a particularly close relationship with
a company, the accountant would be unable to perform the financial statement
due to the assumption the accountant could be bias and falsify the companies
statement.
It is important for financial statements to be accurate and verifiable
because it can be used to predict a company’s future productivity. By having an
accurate statement, future, or current investors will be more trusting in the
company and more willing to invest further. It is a simple concept, but for one who is starting in the field, or thinking about starting in the field, it is important to remember to stay unbiased in their analysis. If they remain unbiased, and keep everything accurate they will be respected by the firm, which could lead to potentially working for other firms or companies as well.
By Katie Howard
Citations:
No comments:
Post a Comment