III sem BBA - Corporate Accounting - Ch1 - Meaning of Standards

Описание: What do you mean by accounting standards?


Accounting standards are the written statements consisting of rules and guidelines, issued by the accounting institutions for the preparation of uniform and consistent financial statements and also for other disclosures affecting the different users of accounting information.


Define accounting standards?

Kohler defines accounting standard as "mode of conduct imposed on accountants by law, custom or professional body"


What are the objectives of accounting standards?

To provide information

To harmonize different accounting processes

To enhance the contents

To communicate uniform results

To facilitate comparison

Improve the quality of financial statements


What are the advantages of accounting standards?

Credibility and reliability of financial statements

Uniformity in accounting practice

Elimination of ambiguity

Easy comparison

Determination of managerial accountability

Useful to shareholders

Raises standard of auditing


What are the limitations of Accounting standards?

Difficulty between choosing different accounting alternatives

It gives restricted scope

the accountant and auditor should have knowledge about accounting standards

Lack of unified standard even now globally

Setting standards have its own limitations


Write about the development of accounting standards in India?

In India the accountants tried from very beginning to standardize accounting practices. As a result Generally Accepted Accounting Principles were formed. Later The institute of chartered accountants of India (ICAI) recognised the need to harmonies the diverse accounting policies and practices in used in India. Accordingly the ICAI constituted the Accounting Standards Board (ASB) on 21st April 1977. Which led to a major development in accounting standards in India.