Reliability is a key principle in accounting that refers to the trustworthiness and accuracy of financial information. Reliable financial data can be depended upon by users—such as investors, creditors, and managers—when making economic decisions. For information to be reliable, it must be complete, neutral, and free from material error.

Reliable financial information is:

• Verifiable: Different independent parties should be able to reach the same conclusions using the same data.

• Faithfully represented: The information should accurately reflect the actual transactions and events it represents.

• Neutral: It must be free from bias and not intended to influence decisions in a particular direction.

For example, using original invoices and receipts to record expenses ensures the reported figures are verifiable and trustworthy. Estimates or assumptions, while sometimes necessary, reduce the reliability of the information unless they are well-supported.

Reliability is especially important in audited financial statements, where users expect that the information has been prepared and reviewed according to strict accounting standards.

In summary, reliability ensures that financial information presents a true and fair view of a company’s financial activities. It builds confidence in financial reporting and supports informed, objective decision-making by all stakeholders.