Development Of Accounting Rules By Professional Bodies Accounting Essay

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Interest in the development of accounting rules by professional bodies began growing since the beginning of the second half of last century where there was no common rules of science being applied by practitioners of the accounting profession and one body in each of the industrialized countries develop their own accounting rules, which was considered to be consistent with accounting concepts.

    The term "generally accepted accounting rules" has remained as an art expression to all accountants and auditors that represents all things agreed upon in the science of accounting and acceptable to companies and institutions, even if they act differently in addressing the same subject.

    Standards can be defined as models or instructions leading to a general guide and inform practice in accounting, auditing or audit.

    Thus, standards are different from procedures. Standards give general guidance or guidance on procedures, while the procedures give an executive version of these standards for a specific application.

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   The importance of accounting and auditing standards made the professional organizations in many countries around the world interested in developing standards, and perhaps the most important of these organizations in this area is the American Institute of Certified Public Accountants, AICPA, which was initiated to develop criteria for audit since 1939. Financial and Accounting Standards Body FASB has been formed also in the United States of America since 1973 as a development of Generally Accepted Accounting Principles GAAP which was applied since 1932.

From these definitions, we can conclude the following common general characteristics of the standard: The standard is an evidence of the credibility of the data in addition of being a means of measuring and judgment, It is considered as a benchmark reference for the accountant during the performance of his career, The standard is a way to determine the formal review, The standard is a way to express the personal and professional qualities that must be provided in the accountant, The standard is concluded from the assumptions and concepts that support the existence of it as well as being dependent on a long period of thinking, research and study.

And based on these characteristics, we can define the standard as "a benchmark reference for the accountant in the measurement process and judgment during the performance of his career and it is defined after a long period of thinking, research and study of a set of assumptions and concepts that support the existence of these standards. And it's issued as a mandatory text by the relevant authority or on a voluntary basis when it is published by the relevant profession. "

In my opinion the absence of accounting standards will lead to, inappropriate use of accounting methods, financial statements well be made differently, Difficulty of making internal or external decision by the beneficiaries.

Targets of Accounting Standards Committee, Defining and publishing accounting standards that should consider the public interest when the financial statements are viewed and it should be applied globally. Generally improve regulations and accounting principles for the presentation of financial statements and to reconcile between them.

Decide the relationship between the International Accounting Standards Committee and the International Federation of Accountants and the mutual commitment between them.

The absence of accounting standards leads to difficulty in the decision-making process, since its absence leads to the use of methods or accounting rules which are inappropriate in accounting treatments, leading consequently to produce financial statements which do not reflect the business results and financial position in an honest and faire way, and finally, making errors in decision-making. We find also that the differences in the application of accounting between the projects by following different rules and policies, led to the existence of different information of the same transactions in enterprises operating in the same area, and this leads to uncertainty in accounting information and being unable to make any comparison.

Benefits of determining the financial accounting concepts to the party responsible of setting financial accounting standards are very important, as it gives a general framework where all the criteria are connected to ensure their consistency with each other. Moreover, the conceptual framework of concepts is of interest to other parties as well, including those who prepare the financial statements, persons who review them, and those who use the information given in the statements.

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This is supported by the analysis made by the American Financial Accounting Standards Board first finding a basis that can be considered as a reference to resolve accounting problems in the absence of established standards applicable to them. In light of this framework, we can analyze the circumstances that led to the emergence of those problems. Also, we can focus on alternative solutions and making exclusions of other alternatives. On the basis of this framework, managers can prepare the financial statements and Auditors can find solutions to the problems referred to with some confidence that it's consistent with the conceptual framework of the concepts that will provide the same solutions, and thus The conceptual framework of the concepts of financial accounting is a basis which is considered as a guidance for the analysis of accounting problems, and predict the extent to which the solutions can be relied on, second Putting limitations on the personal amendments while preparing financial statements: There should not be so many details to provide appropriate solutions that apply automatically to a certain group of financial realities, because having so many details make it an automatic framework rather than a conceptual framework. Otherwise, this well makes it difficult to develop appropriate accounting solutions for many of the problems that enterprises may face, third Conceptual framework of concepts increases confidence in the financial statements and improve the ability to understand them.

In my opinion I think that without accounting standards Inappropriate use of accounting methods Financial statements well be made differently Difficulty of making internal or external decision by the beneficiaries so each organization should follow the accounting standards that should consider the public interest when the financial statements are viewed and it should be applied globally and in my opinion The absence of accounting standards leads to difficulty in the decision-making process, since its absence leads to the use of methods or accounting rules which are inappropriate in accounting treatments, leading consequently to produce financial statements which do not reflect the business results and financial position in an honest and faire way, and finally, making errors in decision-making. We find also that the differences in the application of accounting between the projects by following different rules and policies, led to the existence of different information of the same transactions in enterprises operating in the same area, and this leads to uncertainty in accounting information and being unable to make any comparison.