Accounting Standards

Accounting Standards are written policy documents issued by a recognised expert body — in India, the Institute of Chartered Accountants of India (ICAI), with corporate financial reporting now governed by Indian Accounting Standards (Ind AS), which converge with International Financial Reporting Standards (IFRS) — laying down uniform rules for recognising, measuring, presenting and disclosing specific items in financial statements.

Need for Accounting Standards

• To bring uniformity in accounting treatment across different companies, so financial statements can genuinely be compared.
• To improve the reliability of financial statements by narrowing the range of alternative treatments a company may choose.
• To prevent companies from manipulating figures for their own benefit and to protect the interests of investors, creditors and other users.
• To assist auditors in forming an opinion on whether accounts have been prepared according to accepted principles. …