What does verifiability in accounting mean?

Verifiability in accounting refers to the ability of independent parties to assess the reliability of measurements and information presented in financial statements. This characteristic is crucial for ensuring that the reported financial data can be confirmed through evidence or can be corroborated by independent observers. When financial statements are verifiable, it increases user confidence in the accuracy and trustworthiness of the information, leading to better decision-making by stakeholders, such as investors and creditors.

In practice, this means that a company's financial records should contain supporting documents, such as invoices, contracts, or receipts, that facilitate an objective review of the reported figures. This promotes transparency and accountability in financial reporting, which are fundamental principles of good accounting practices.

The other options do not align with the concept of verifiability: erasing and rewriting data undermines reliability; confidentiality of transactions is not a characteristic of verifiability; and the speed of statement preparation is unrelated to the reliability of the information.