Abstract
There is a risk when company stakeholders make decisions using accounting information with varied qualities in the same way. In order to evaluate the accounting information quality, this paper proposed an approach to the evaluation of the quality of accounting information based on relative entropy in fuzzy linguistic environments. Firstly, the accounting information quality evaluation criteria are constructed not only from the quality of the accounting information content but also from the accounting information generation environment. Considering that the rating values with respect to the criteria are in linguistic forms with different granularities, the method to deal with the linguistic rating values is given. In the method, the linguistic terms are modeled with the 2-tuple linguistic model. Relative entropy is used to calculate the information consistency, which is used to derive the weight of experts and criteria. Finally, the example is given to illustrate the feasibility and practicability of the proposed method.
Highlights
With economic development, accounting information is increasingly important
In order to resolve the above-stated problems, in this paper, we proposed the approach to the evaluation of the quality of accounting information based on relative entropy in fuzzy linguistic environments
As the main influence factor of the accounting information generation environment, the internal environment should focus on two aspects of internal control and corporate governance
Summary
With economic development, accounting information is increasingly important. The quality of the accounting information of each company is different since accounting practitioners’ professional ability and professional ethics vary greatly within companies. The quality of accounting information affects the decision-making of investors and the interests of creditors. 2016, there are 2952 listed companies in China (A shares and B shares). These financial reports have been authenticated by the third party auditors, it is hard to discriminate between “pass” and “fail” for the accounting information through the audit reports [1]. The personalized needs of different users cannot be satisfied by the evaluation results of accounting information quality from auditors
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