Information quality has always been a favorite topic for financial information users, statndards setters, legislators and Reseachers because it causes to maintain and stregthen the position of accounting information system in Capital Markets and deminishes agancy costs between managers, Equityholders, Creditors and other parties.
The importance of information quality to create trust and confidance atmosphere in capital markets and the bold role of such markets in leading resouces to productive industreis and optimal allocation, highlights addressing this issue.
Quality is dependent to decision. Accounting information from the perspective of economic information is used for two objects: decision making (valuation) and control (agancy). Information Characteristics in valuation perspective is its strengh in cash flows estimation and in agancy perspective is its strengh in distinguishing disirable and undisirable actions.
This research aims in addition to describe application of beysian theory (1763) in definition of information concept and its quality, analyses required characeristics of qualified information(Earnings) in each perspective (include: valuation and agancy ) and its effect on cost of capital.