Quiz : Ac


Global accounting standards- The accounting standards which are formed for the purpose of creating a parity in the accounting structure at global level. Analyze the needs of global accounting structure in today's business environment. As the concept of globalization is accepted globally by almost every nation, which has faded away the geographical boundaries for doing business. Earlier, the businesses were doing their operations within their national boundaries, whereas, now-a-days there are no such boundaries and hence, there is a need to adopt single accounting structure i.e. global accounting structure and the global accounting structure is governed by the global accounting standards. In current business environment, corporations that wish to issue stocks through capital markets in various nations are bound to follow the different rules of each country. This leads to hindrance to entry. In absence of global accounting standards, every nation adopts different accounting policies and procedures and the business which is having multi-national operations, is facing difficulty in preparing its accounts in a uniform manner, as the business has to comply with the accounting standard of all the nations in which it is having operations. Hence, the need of global accounting standards is very essential for proper and uniform accounting.

Generally Accepted Accounting Principles: The principles which are followed by the management to prepare the financial reports according to the requirements of each external and internal stakeholders are generally accepted accounting principles. While auditing the financial activities of the companies, some specific set of guidelines are required to be followed. The objective of setting such standards is to check the correctness, consistency and reliability of the reports sanctioned by the auditors. International financial reporting standards are the principles which are set up by the International Accounting Standard Board to be followed worldwide to bring uniformity and consistency in the presentation and understandability of the financial statements of the organizations. International financial reporting standards (IFRS) are globally acceptable. Those countries who are emerging their own principles to adapt IFRS, their domestic public companies follow the principles of their nation. IFRS is used worldwide by many companies to ensure transparency, accountability and efficiency in the financial markets. Almost 27,000 domestically listed companies on 88 major stock exchanges use IFRS standards to attain these objectives.

International Financial Reporting Standards are the internationally recognized accounting standards. They aim at bringing the transparency, efficiency, uniformity, and accountability to the global financial markets. International Financial Reporting Standards or IFRS are set and developed by International Accounting Standards Board or IASB. IASB is an independent and not-for-profit organization which operates under the oversight of the IFRS foundation. Also, in US, the Financial Accounting Standards Board or FASB is responsible to set the Generally Accepted Accounting Principles (GAAP) used by the US companies.