what are the primary objectives of issuing accounting standards
Answers
Answer:
THE PRIMARY OBJECTIVE OF ACCOUNTING STANDARDS ARE:
To provide a standard for the diverse accounting policies and principles.
To put an end to the non-comparability of financial statements.
To increase the reliability of the financial statements.
To provide standards which are transparent for users.
To define the standards which are comparable over all periods presented.
To provide a suitable starting point for accounting.
It contains high quality information to generate the financial reports. This can be done at a cost that does not exceed the benefits.
For the eradication the huge amount of variation in the treatment of accounting standards.
To facilitate ease of both inter-firm and intra-firm comparison.
Explanation:
The primary objective of accounting standards is to harmonize the different accounting policies. The policies are used in the preparation of financial reports. These reports could be prepared by different enterprises. This would bring about a certain degree of confusion at the time of comparison.
This is where the accounting standards come in. The objective of accounting standards is to bring a standard to the policies. This will facilitate easy comparison with respect to inter-firm and intra-firm reporting.