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Approaches to Standard Setting in Accounting - Essay Example
Author : dietrichfreda
Finance & Accounting
Pages 8 (2008 words)
Topic: Approaches to Standard Setting in Accounting Institution Affiliation: Date: Introduction Accounting standards are developed to enhance financial information provision to relevant and interested stakeholders…
Financial statements are prepared and presented through observation of relevant accounting standards and procedures. Users of these statements, therefore, need to derive assessments that are realistic in regard to any given entity’s financial status. These users are spread across the economic context, based on the interest of each of them in the financial positions of different entities. To act in the satisfaction of these stakeholders, accounting standards are crucial in ensuring that financial reporting is effective enough. In this regard, capital markets operations are assessed for their efficacy in the context of accounting standards integration. The impacts of accounting standards on different entities can take more than one way. The impacts can be individual-entity-based or even broader to encompass several sectors of the economy or the entire economy at large, including capital and other markets. On a smaller scale, accounting standards enhance individual entity accountability and further provide strong basis upon which investors, creditors and other stakeholders are managed. In general, corporate governance is improved prior to business arrangements of different entities. ...