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Precision and accuracy in accounting have gradually evolved ever since the formation, implementation and revisions of numerous regulations, standards, and conceptual framework around the world. These parameters were set by national and international accounting bodies to ensure accountability. ... 24] In other words; corporations are accountable by accounting bodies to provide accurate information in their financial statements. Financial statements are formal reports providing information on a company’s financial position, cash inflows and outflows, and the result of operations [Hermanson, 1992, P.13]
Accounting standards are needed not only to ensure the accuracy and transparency of financial statements but also the comparability between statements. The standards are needed to define the ways in which accounting numbers are presented in financial statements, so that the presentation is less subjective. ... The published financial statements of different companies, and of particular companies from one year to the next, should be produced on a comparable basis if they are to be useful. If the accounting principles and policies adopted by different companies vary too widely then our attempts to assess financial position of performance could become almost meaningless. The credibility of financial statements is enhanced if they comply with accounting standards.
There are many accounting standards as ‘accounting is a social institution established by most cultures to report and explain certain social phenomena occurring in economic transactions’ [Deegan,2000, P.
Approximate Word count = 1085
Approximate Pages = 4.3
(250 words per page double spaced)
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