The reliability of job-cost records indeed depends on the reliability of the inputs because only accurate and precise data will ensure that the cost calculations related to a specific job are correct and can be trusted for financial decision-making.
The statement 'The reliability of the job-cost records depends on the reliability of the inputs.' is true. Reliability, in this context, refers to the consistency of a measure and is concerned with the accuracy and preciseness of data entered into job-cost records. Accurate job-costing involves systematically capturing all relevant costs associated with a particular job, ensuring that the data is free from errors and biases. When inputs are reliable, the records are more likely to reflect the true cost of a job, making them valuable in budgeting, pricing, and decision-making processes. However, if the inputs are flawed, the ensuing records may not be dependable for making important financial decisions.
For instance, in cost accounting, reliability is crucial because decision-makers need consistent and repeatable data to establish trust in the reported figures. If job descriptions provided by employees themselves are inaccurate or biased, as suggested by Dierdorff & Wilson (2003), the reliability of the job analysis could be compromised, affecting cost estimations and potentially leading to erroneous strategic decisions. Similarly, in economic interactions between firms, as illustrated by the case of Firm A considering whether Firm B will cheat on their agreement, trust in the reliability of the other party's actions plays a vital role in strategic decision-making.