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Because the value of a business is largely driven by financial performance, it's important to have generally accepted accounting standards that all companies follow. Without them, each company could report their performance differently, and it would be nearly impossible to compare them to each other. Companies are allowed to show pro-forma results that apply non-standard accounting principles if they feel it's necessary to tell the story around their performance, but these are a 2nd set in addition to the standard principles which are required.
Chris Hawkins
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∙ 13y agoAccounting standards provides some parameters within which a practicing accountant must apply his skills. Further, if there are accounting standards uniformity in theory and practice can be acheived.
Wiki User
∙ 11y agoAccounting standards:
- Prescribed methods of accounting by the accounting standards or financial reporting standards regulation body in your jurisdiction.
Wiki User
∙ 11y agoAccounting standard ensures that uniform accounting procedures are followed. Such uniformity enables comparison of financial performance between various periods of the same unit and various companies of similar activity for the same period. Such comparison is a tool of gauging the financial performance of the entity thereby gauging the management's performance.
Wiki User
∙ 11y agoAccouinting standards are necessary in order to protect the public. Public company financial statements are required to be prepared in accordance with national accounting standards, so that current and potential investors can be confident that they can rely on the financial statements in making investment decisions.
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∙ 10y agoObjective of accounting standards is to ensure that financial statements of companies are prepared in same manner all around the globe so that nobody face difficulty while reading reports.
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∙ 11y agosignificance of accounting standard
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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 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.
Who sets accounting standards for the government?
If the entity is a state or local governmental unit, it is subject to the reporting standards and requirements of the Government Accounting Standards Board.
