Accounting Policy as an Instrument for Formation of Accounting Information in Management

Abstract

The article is aimed at studying accounting policy as an instrument for formation of accounting information in management. The essence of the concept of of «accounting policy» is analyzed. It is determined that the full and truthful reporting of the enterprise’s financial results and financial status depends to a large extent on the level of formation and application of accounting policy that takes into attention the conditions of the enterprise’s activities, organizational and technological features etc. It is noted that modern accountance should be seen primarily as an information base used for taking efficient managerial decisions. The authors allocate the importance of accounting information and its principles in the formation of accounting policy: sufficiency; usefulness; objectivity; accuracy and relevance. Criteria for the importance of accounting information in the formation of accounting policy are formed. It is proved that accounting policy, as an instrument for formation of accounting information in management, should ensure the following: full reflection in the accountance of all business facts; accounting of business facts is reflected not only upon the basis of their legal form, but also upon the economic content of the facts and the conditions of the economy; identity of the data from analytical accounting with the turnovers and balances; rational and economical accounting based on the business conditions and the size of enterprise. The aspects that need to be taken into consideration when forming accounting information as the basis of accounting policy in management are defined, i.e.: accounting information should integrate both financial and operational (non-financial) information; development of accounting information should facilitate the achievement by the economic entity of its strategic objectives; accounting information should contribute to understanding the causes of events and phenomena that have occurred in the economic life of the enterprise.

Keywords

• accounting information
• accounting policy
• management