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Finance & Accounting
Pages 7 (1757 words)
Name: Course: Date: Accounting Standards – Boon or Curse? Task A: Summary of Baxter’s views on accounting standards. Initially, accounting was without any aspect of commonality or standardization. Nevertheless, starting 1938, the desire to have a standardized way of accounting for the costs and revenues incurred by institutions arose, promoting the provision of the Statement of Accounting Principles, which were published by the American Institute (Baxter, 1979 n.p.).
From this point, the accounting institutions embarked on seeking an alternative to different accounting principles they had already developed, by generating alternative procedures, which were superior to the others. This move was sparked by the desire for good accounts for the companies that were growing during this period, and the higher desire for uniformity in accounting procedures (Baxter, 1979 n.p.). This move was emulated by the Institute of Chartered Accountants in England and Wales immediately after the end of World War II, and eventually many other countries followed. Although it did not initially start as a mandatory move, there was a high recommendation for companies to apply the generated standardized accounting procedures, without seeking the consent of such companies. The accounting bodies majorly depended on the loyalty of the members, to comply with the standards, since there was little they could do to enforce these standards to the companies and other bodies that were not willing to adhere to them (Baxter, 1979 n.p.). ...
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