Primary Decision-Specific Qualities in Accounting

Relevance and reliability or the two primary qualities that make accounting information useful for decision-making. Subject to constraints imposed by cost and materiality, increased relevance and increased reliability are the characteristics that make information a more desirable commodity.

If either of those qualities is completely missing, the information will not be useful. Though, ideally, the choice of an accounting alternatives should produce information that is both more reliable and more relevant, it may be necessary to sacrifice some of one quality for a game in another.

To be relevant, information must be timely and it must have predictive value or feedback value or both. To be reliable, information must have representational faithfulness and it must be verifiable and neutral.

Comparability, which includes consistency, is a secondary quality that interacts with relevance and reliability to contribute to the usefulness of information. Two constraints are included in the hierarchy, both primarily quantitative in character.  Information can be useful and it be too costly to justify providing. To be used useful and worth providing, the benefits of information should exceed its costs.

All of the qualities of information are subject to a materiality threshold, and that is also shown as a constraint.