Question

What are the objectives of Accounting Standards?

Answer 1

(i) Accounting standards provide the norms on the basis of which financial statements should be prepared.

(ii) Accounting standards ensure uniformity in the preparation and presentation of financial statements: by removing the effect of diverse accounting practices, Accounting standards make financial statements meaningful and comparable.

(iii) Accounting standards provide a useful system to resolve potential financial conflicts of interest between various groups.

(iv) Accounting standards help auditors in the audit of accounts. Accounting standards raise the standard of an audit of accounts.