Final answer:
In financial accounting, the primary information characteristic focused on is historical data pertinent to the financial standing and performance of a company, more widely accessible as the company establishes itself. The concept of imperfect information is crucial, highlighting that typically firm operators have more information than external investors. As companies mature, wider information distribution encourages investment from bondholders and shareholders, regardless of the personal knowledge of managers.
Step-by-step explanation:
The key information characteristic emphasized in financial accounting is its focus on the financial position, performance, and changes in the financial position of an enterprise that is useful to a wide range of users in making economic decisions. Financial accounting provides historical data, as opposed to managerial accounting which focuses on providing information for internal decision makers. One of the most important aspects of financial accounting is the principle of imperfect information.
When choosing between sources of financial capital, firms must consider the patterns of how businesses raise financial capital, often explained in terms of imperfect information. Imperfect information denotes a situation where there is an unequal distribution of information between buyers and sellers in the market. Typically, the individuals running a firm are privy to more comprehensive information on the potential future profitability of the company than external investors, who provide the financial capital.
As firms mature and their business strategies begin to prove profitable, the necessity of having personal knowledge of the firm's managers and business plans diminishes because more information about the company's products, revenues, costs, and profits becomes widely available. This widespread access to information makes outside investors such as bondholders and shareholders more inclined to invest in the firm without the need for personal connections to the company's managers.