Which principle ensures that financial reports are relevant to decision-making?

Timeliness is the principle that ensures financial reports are relevant to decision-making because it emphasizes the importance of providing information quickly enough for it to be actionable. Stakeholders, including management, investors, and regulatory bodies, need up-to-date information to make informed decisions. If financial reports are delayed, they may no longer reflect the current situation or may be rendered irrelevant due to changes in circumstances. Timeliness ensures that decision-makers have access to the most recent data, thus enhancing the effectiveness of their decisions.

Other principles, while important in their own right, do not focus specifically on the timing of information in relation to its relevance for decision-making. Accuracy is about the correctness of the information, transparency pertains to how clearly the information is presented, and consistency refers to the use of the same accounting principles over time for comparability. However, without timeliness, even accurate and transparent reports may not assist in effective decision-making.