Accounting Standards are best described as:
A) the result of a political process among groups with diverse interests.
B) presentation standards mandated by the Securities and Exchange Commission.
C) the state-of-the-art presentation of the science of accounting.
D) measuring the quality of safeguarding assets.

Question

Quizplus · Accepted Answer

Accounting standards are created through a political process that involves various stakeholders with diverse interests, such as businesses, investors, regulators, and accounting professionals. These groups negotiate and collaborate to establish a common set of rules and principles that should be followed in preparing financial statements. Accounting standards are not presentation standards mandated by the Securities and Exchange Commission, which only regulates financial reporting by publicly traded companies. While accounting standards reflect current accounting knowledge and best practices, they are not equivalent to the "state-of-the-art presentation of the science of accounting" or a measure of asset safeguard quality.

Accounting Standards Are Best Described As