Dichotomy of Accounting Information Quality: An Explanatory Framework

Accounting information is an important basis for many stakeholders,including investors,to make judgment and decisions.The quality of accounting information will directly affect the decision-making.In this paper,the dichotomy is raised about accounting information: auditors assess accounting information in accordance with accounting standards;while accounting academic researchers evaluate accounting information in the light of accounting order.The dichotomy provides an explanatory perspective for the existence of different evaluations of the same accounting information;then,we make a comparison between the quality of accounting information and that of audit.This paper argues that the accounting standards should steadily improve and be refined towards accounting order,which is the key to narrowing both evaluations while earnings management studies have provided a solution in this regard.