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ACCOUNTING STANDARDS
AS are the defined accounting policies issued by gov. or expert institute. The standards are issued to bring hormonization in follow up of accounting policies.
CONTD
Permit some choices in handling a transaction, but would be extremely limited. Enhances comparability among companies, it is often constraining & can be difficult to apply to many of todays new complex & creatively structured financial transactions. may include a lack of flexibility with regard to changing conditions and new products, hence requiring almost continual maintenance at times.
CONTD
potentially very flexible with regard to new and changing products and environments. As such, they should also require less maintenance more difficult to audit relative to compliance, and concern over consistent and reliable interpretations across entities. To the extent that they rely on individual judgment to interpret and implement the standards, there is a danger that they can be used to manipulate financial results.
Our rule based memorization, doesnt prepare students for the ambiguous business world they encounter upon graduation.
CONCLUSION the information provided in the financial statements is relevant, reliable and comparable across reporting periods and entities. Increased discussion has pushed accountants towards principle-based accounting, but it is recognized that the method needs to be modified to make it more effective and efficient.