Accurate financial reporting is essential for stakeholders' decision-making and market perceptions. This research project aims to investigate the effect of accounting for contingent liabilities on firm financial statement reliability. Contingent liabilities, while not recognized as actual liabilities, can have a significant impact on a firm's financial health and risk profile. The study will explore how the accounting treatment of contingent liabilities influences the reliability and transparency of financial statements. By analyzing the effect of accounting for contingent liabilities on firm financial statement reliability, this research seeks to provide valuable insights for accounting professionals, financial analysts, and corporate stakeholders in understanding the implications of contingent liability accounting on financial statement reliability and decision-making. The findings of this research are expected to contribute to the existing body of knowledge in the field of financial reporting, offering practical implications for financial analysis, contingent liability accounting practices, and informed decision-making in the context of accounting's impact on financial statement reliability.