ACCOUNTING QUALITY: HOW TO DEFINE AND MEASURE?

Abstract

In each company the biggest flows of information emerge in the accounting area. Today’s business environment, globalization processes, technological progress and other factors determine the necessity to manage it. Company’s leaders, managers need timely, actual and relevant information for decision making. In the article is analyzed the conception of accounting quality and potential methods of accounting quality assessment, which can be found in the scientific literature. Accounting quality can be analyzed as construct, consisted of two components: technical quality and negotiated quality of deliverables. In the assessment area there were distinguished two research trends: assessment, based on accrual metrics and accounting quality assessment in informational aspect, which was chosen for practical testing.

Research results have showed that there isn’t united opinion among scientists for the concept of accounting quality. For the assessment of the accounting quality there are used accrual based metrics, measures of earnings aggressiveness, loss avoidance and value relevance, sometimes the list is complemented by timeliness indicator, but, in authoress opinion, it is not enough only financial measures in order to reflect the quality of accounting. It is necessary to see such characteristics of accounting information as accuracy, accessibility, comparability etc.