Question

What are the benefits and limitations of Accounting Standards?​

Answer 1

Answer:

Accounting Standards (AS) are basic policy documents. Their main aim is to ensure transparency, reliability, consistency, and comparability of the financial statements. They do so by standardizing accounting policies and principles of a nation/economy. So the transactions of all companies will be recorded in a similar manner if they follow these accounting standards.

These Accounting Standards (AS) are issued by an accounting body or a regulatory board or sometimes by the government directly. In India, the Indian Accounting Standards are issued by the Institute of Chartered Accountants of India (ICAI).

Answer 2

Answer:

These are the benefits:

1) Attains Uniformity in Accounting

2)Improves Reliability of Financial Statements

3) Prevents Frauds and Accounting Manipulations

4) Assists Auditors

5)Comparability

6)Determining Managerial Accountability

These are the limitations:

1)Difficulty between Choosing Alternatives

2)Restricted Scope