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Approaches to Standard Setting in Accounting - Essay Example
Author : rippinmarlen
Finance & Accounting
Pages 10 (2510 words)
Approaches to standard setting in accounting Name: Institution: Course: Date: Since the 1960s’, the accounting profession has been downplayed upon for its failures. This has led to the accounting practitioners to look for a way to legitimize the accounting standard setting…
The body also cited the reasons at which it was setting these accounting settings and some of them included; to give users of accounting information about their financial situation, their financial performance, and the financial conduct of a firm (LeRoy, 2007). Another reason was to assist public accountants with steps to enable them perform their work with care in offering their services in the accounting market. These standards were set so that all financial statements were consistent and had the ability to describe their financial performance. These accounting standards can also be known as Generally Accepted Accounting Principles (GAAP), they are generally accepted because there is an authoritative accounting body that set them and the body oversees the implementation of these standards. Without these standards the consumers of financial statements would need to learn accounting rules of different firms, this would be a difficult task for multi investors to compare these financial statement accounting rules. Some of the bodies that regulate these accounting standards are the Securities and Exchange Commission (SEC). This body was formed to establish these accounting standards for the public traded firms. ...