Question: What are some of the costs of providing accounting information? What are some of the benefits of accounting information? Describe the cost-benefit factors that should be considered when new accounting standards are being proposed.

Accounting information is defined as the accounting statements processed by way of accounting and bookkeeping. It includes both financial and non-financial data and is utilized by a large body of users such as customers, employees, investors, creditors, and the government.

Costs of supplying accounting information comprise the cost of gathering as well as processing, distributing, auditing, potential litigation, exposure to competitors, inspection, and evaluation.

Advantages to users comprise higher control of management and obtaining capital at a minimal cost. Users may get more effective information for allotment of resources, tax evaluation, and adjustment of rates.

New accounting standards need displaying of information that is not easily collected by most firms. Verification should be made to ascertain whether the supplemental costs of supplying the suggested information surpass the additional benefits to be received. Such verification needs an application of judgement as the advantages of the expected information may not be clear cut.