The Attributes of a High Quality Accounting Standard

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What are the attributes of a high quality accounting standard? Globalization is a fact of life in today’s worldwide economy. They are many barriers to achieving a true global market; one of these barriers has to do with accounting standards or the presentation of accounting information. Various users have diverse needs for financial information. Companies in different parts of the world had their own methods in preparing their financial statements. Trying to compare the accounting rules of these different companies would have been difficult. As a result, accounting bodies were created in order to standardize the accounting principles in order to avoid any difficulties in the future and make these methods comparable and uniform. As a result, this is how accounting standards were evolved. There are two major standard setting bodies in the world. These are the U.S Financial Accounting Standard Board (FASB) – the standard they created is called the US GAAP (Generally Accepted Accounting Principles). American companies create statements that follow the US GAAP and the International Accounting Standard Board (IASB) – the standard they create is IAS or IFRS. As far back as 1967 the Accountants International Study Group (AISG) began a foundation to publish papers on important topics. This led to an agreement in March 1973 to establish an international body writing accounting standards for international use. This is how International Accounting Standards Committee (IASC) came into existence.The objectives of the committee were to formulate and publish, in the public interest, standards to be observed in the presentation of financials statements and to promote worldwide acceptance. Also to work generally for the improvement and harmonization of regulation accounting standards and procedures relating to the presentation of the financial statements.The IASC survived for 27 years, until 2001 when the organization was restructured and the International Accounting Standards...
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