Characteristics of Decision-Useful Information

Companies prepare and present information about their business so that investors and other stakeholders can make well-informed decisions about their financial health and prospects. While the bedrock of the capital market system is high-quality, reliable financial statements, investors and other stakeholders also may look to different types of company-prepared information, in addition to financial statements, to help inform their decisions. As such, companies see the benefit of providing information about performance and value creation from different perspectives to meet the needs of different stakeholders.

Moreover, technology and data have given rise to entirely new business models and company structures, with much of the value of companies being driven by information outside of audited financial statements. Stakeholders, including certain institutional investors, increasingly are interested in—and rely on—unaudited information when assessing a company’s value.

While the type of information investors and other stakeholders rely on or desire may vary depending on the stakeholder and context, there is nonetheless a strong demand for information outside of audited financial statements that is useful for capital allocation and governance decisions.

Explore characteristics that contribute to making information decision-useful

Reliability

Comparability

Relevance

U P N E X T

Auditors’ Role: Building Trust and Confidence in Information