Question

Need and Benefits of Accounting Standards?big answer plz maximum 15 lines plz​

Answer 1

ANSWER :

According to T. P. Ghosh, "Accounting standards are the policy document issued by the recognized experts of accountancy body relating to various aspects of measurement, treatment and disclosure of accounting transactions and events".

There are certain benefits and needs of Accounting Standards as these standards play an important role in the field of accounting.

✠ Some needs and benefits of Accounting Standards are mentioned below :-

• ✎ Accounting Standards are needed for harmonization of diverse accounting policies and practices : Accouting is said to be the language of business. There are diverse accounting policies as well as practices which are followed by different business enterprises. Accounting standards must be developed for the development of accounting with the central idea of harmonize such diverse accounting policies and practices.

• ✎ Accounting Standards reduce the reporting freedom : Generally, the reporting freedom can not ve granted by the corporations which might cause damage in the interest of creditors and investors. Reporting freedom means freedom of choicing what to report and how to report on market principles. Accounting standards specify some rules. principles, procedures, methods in this regard. Therefore, for the reduction of the reporting freedom of corporations, accounting standards are needed.

• ✎ Accounting Standards are needed for recognition of the principle of equity : Another need of accounting standards is the recognition of the principle of equity. In dissemination of accounting information, all the interested user groups are to be equally treated by an entity is desired from the point of view of principle of equity.

• ✎ Accouting Standards are beneficial for ensuring consistency and comparability : Accounting Standards provide guidelines in details in preparation and presentation of financial statements. Accounting standards bring uniformity in financial reporting. Therefore, it is necessary in order to ensure consistency as well as comparability in the data contained in the financial statements.