Essay on why we Need Accounting Standards
Get essay help for this.Mail us for query at
assignment4finance@gmail.com
This essay talks about Accounting Standards
which is important in financial. And it is interesting topic which discusses
identified accounting standards which is important to each company. And it is
analysis different things which relate with Accounting Standards as:
International Accounting Standards (IAS), Accounting Standards Board (ASB), why
we need accounting standards? , different accounting standards, and finally
advantages and disadvantages of accounting standards
Accounting Standards are authoritative
statements of how particular types of transaction and other events should be
reflected in financial statements and accordingly compliance with accounting
standards will normally be necessary for financial statements to give a true
and fair view. [Aidan, (1971)]
In fact, Inflation accounting was only one part
of a bigger move towards accounting standards. Standards had been proposed a
few years earlier to limit the extent for judgment in the preparation of
accounts.
International Accounting Standards (IAS) are lay
down by the international Accounting Standards Board. Now these are compulsory
for all European listed companies. The US market rejects IAS without
reconciliation to US GAAP. UK non-listed companies still follow UK accounting
standards.
Further chapters you may read :
Accounting - Users of Accounts
Further chapters you may read :
This essay has been submitted to us by a student
in order to help you with your studies. This is not an example of the work
written by our professional essay writers.
Accounting Standards Board
The connection among the International
Accounting Standards Board (IASB) and the Financial Accounting Standards Board
(FASB) is one that can be increased continuously. These have same task which
able to improve continuously and make rules to preparation financial reports.
Financial Accounting Standards Board (FASB) is
considered one branch of the financial statements. This company based in
Norwalk and Connecticut and its non-profit. In financial accounting, the (FASB)
has responsibility for put principles of accounting for the private sector.
Why do we need accounting standards?
Accounting is used in every type of business and
organization from big multinational organizations to local shop, from traders
and companies. It can cover an unlimited range of activities as different for
example: charities, doctors, lawyers, mines, betting shops, banks, cinemas,
circuses, farms, airlines, estate agents and so on.
People invest in organizations of all kinds and
they would all like types have faith and trust in the figures reported in their
financial statements. But this variety of kind of business, and of size, means
that, while general principles can be laid down, detailed regulations that it
would make sense to apply to one company would be unsuitable for another
company. For example; impossible to provide 100% assurance of the validity of
the financial statements of every conceivable organization through the creation
of a single set of rules and procedures.
Accounting is very important to help the reader
to arrive conclusion, and there are important set guidelines to take any thing
relate to the accounting. These guidelines are called accounting policies. The
intricacies of accounting policies allowed companies to change accounting
principles for their benefit. This made it impossible to make comparisons. For
example; Accounting Standards in India are issued by the Institute of Chartered
Accountant of India (ICAI). At present there are 30 Accounting Standards issued
by ICAI.
Different Accounting Standards
Different accounting standers are a drag on
improvement in much the same way as different languages are an inconvenience.
Unlike creating a world language, crating one set of standards is achievable.
Apart from the possible saving for companies with different international
structure, complying with an internationally understood accounting paradigm
opens up a wider investment audience. [Betsy Willis and Becky Jones, 1998]
Conceptual Framework
The development of a coherent and consistent set
of accounting principles which underpin the preparation and presentation of
financial statements.
First- and fundamental importance- all involved
in global financial reporting must have a common mission or objective. At the
heart of that mission is a conceptual framework which must focus on the
investor, provide decision-useful information, and assure that capital is
allocated in a manner that achieves the lowest cost in our world markets.
A conceptual framework is an attempt to create a
set of fundamental accounting principles which will help standard-setting. A
major achievement of the search for a conceptual framework has been the
emergence of the decision-making model. The essence of this is that the
objective of financial statements is to provide financial information useful to
a wide range of users for making economic decision. A second objective is to
provide financial information for assessing the stewardship of managers. In
order to be useful, this information must be relevant, reliable, comparable and
understandable. Although there is general agreement on the essentials of a
decision- making model, there is little consensus on which measurement model
should underpin the decision-making process.
Conceptual Framework
Advantages of Accounting Standards:
Accounting standards is keeping track of
transaction
It be used to predict cash flow and maintain a
budget and for revenue expected
It has facilities for offer uniform reports to
financial statement
It is useful to investors and to foreign groups
to evaluate the development of another investment in different companies in different
countries
Standards helps accountant to contact with their
customers through the offer set of laws of authority to which the accountants
can appeal
It is use to regulate the different accounting
policies and practices with a view to eliminate to the scope possible the
non-comparability of financial statements
Disadvantages of Accounting Standards:
An unfavorable condition or circumstance.
Something that places one in an unfavorable
condition or circumstance.
Damage or loss, especially to reputation or
finances; detriment.
Conclusion
Accounting standards is important for any
company in the world. It is help companies to know how much is loss or gain
monthly and yearly. So its must be careful when do its account to be all thing
correct. It is necessary to keeps a budget and revenue for the company. Also it
is important in accounting standards show framework of any project the company
will does such as know the objective of financial statement, Underlying
assumptions…etc. Also it considers an attempt to create group of accounting
principles which help to put standards.
It is also important to read :Working capital cycle
Working capital - its importanceDisclaimer
This essay has been submitted to us by a student
in order to help you with your studies. This is not an example of the work
written by our professional essay writers.
No comments:
Post a Comment