ABSTRACT
This chapter focuses on the concept of the quality of earnings considered from the angle of the qualitative characteristics of financial statements, which determine the usefulness of information contained in financial statements to their recipients. The purpose of the chapter is to systematise the features expected of the information presented in financial statements. It offers an analysis of qualitative characteristics carried out taking into account the International Accounting Standards Board Conceptual Framework for Financial Reporting. It also stresses the significance of the accounting conceptual framework as an expression of accounting theory for accounting practitioners. The qualitative characteristics of financial statements are shown from the perspective of the purpose of financial reporting and the principles used for its purposes. The chapter also discusses the main users – target audience – of reporting information. Businesses communicate with their environment through e.g. the financial information presented in the reported financial statements.
