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Accounting standards are necessary to promote high quality financial reporting. The fundamental role of accounting is to communicate economic information about businesses and other organization to various stakeholders including government, investors, shareholders, suppliers, lenders, customers and the general public. These stakeholders use such information to take decisions and to assess the stewardship of people appointed to manage such organizations. If this information is not of a high quality standard, then the stakeholders would be unable to take effective decisions that will benefit them. For example, if a financial report is manipulated to show higher profits, investors would hold on to their shares with the belief that the company is doing well.
Accounting standards came to be developed from the mid sixties onwards to promote the integrity of the accounting profession by way of ensuring uniformity in the way Accountants report transactions in their books and also in their preparation of the final accounts of businesses. This is by and large aimed at boosting the confidence of stakeholders, particularly shareholders and potential investors in the accounting profession.
Good and useful information should have the essential characteristics of understandability, comparability, relevance and reliability in order to play its role effectively.
Accounting standards serve to promote the understandability , comparability, relevance and reliability of financial reports.
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What are the nature of accounting standards?
what are accounting standards nature
Mandatory accounting standards issued by ICAI?
accounting standards
Is the financial accounting standards advisory board the same as the federal accounting standards board?
The Financial Accounting Standards Board (FASB) is a private organization (within the Financial Accounting Foundation) that issues financial accounting and reporting standards for nongovernmental entities.
What are the differences between Indian Accounting Standards and International Accounting Standards?
Indian accounting standards are developed by Indian board and only applicable in India while international accounting standards are developed by International Accounting standard board and applicable to all countries.
What is the Importance of accounting principles to a financial analyst?
off-course it is requisite to know the accounting principles. For financial analyst it is necessary to know firstly GAAP analysis (generally accepted accounting principles).Where accounting standards ,rules and regulation are stated in accordance with the international accounting standard board. Obivously,we have numbers of accounting standards IAS and priciples on the basis of this financial analyst enable to make decision. In a nut shell, when we have accounting rules standards and a defined guideline it will be very convinient for financial analyst to make decision.
What are the differences between Indian accounting standards and U.S. accounting standards?
Here is a link to a great paper by from the SEC , outlining the major differences in International Accounting Standards.
What are the most common accounting standards?
The most common accounting standards are the ones that one can find in the Generally Accepted Accounting Principles (GAAP), those are a group of accounting standards very common and widely accepted.
When was Financial Accounting Standards Board created?
Financial Accounting Standards Board was created in 1973.
What are advantages and disadvantage of harmonisation of international accounting standards?
what are advantages and disadvantages of harmonisation of accounting standards
Who issues accounting standards in India?
National Advisory Committee on Accounting Standards
What board is responsible for accounting standards?
The Financial Accounting Standards Board (FASB) assumed responsibility for accounting standards and principles in 1973. It is authorized to amend existing rules and establish new ones.
When was the Governmental Accounting Standards Board established?
The Governmental Accounting Standards Board (GASB) was organized in 1984 under the auspices of the Financial Accounting Foundation.
