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Chapter 1: Q3IFRS (page 35)

Question: What is the benefit of a single set of high-quality accounting standards?

Short Answer

Expert verified

Answer

A single set of high-quality accounting standards ensures comparability.

Step by step solution

01

Definition of Accounting Standards

Accounting standards are known as accounting standards and procedures that a business entity uses while reporting its accounting information in the financial statements.

02

Benefits of a single set of high-quality accounting standards

A single set of high-quality accounting standards helps the investors make better investment decisions by ensuring comparability. When the different business entities use the same accounting standards, it will be easy for investors to compare them. For example, Company A operating in the U.S, can be compared to its international competitor, company B, if both of them use a single set of accounting standards.

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Most popular questions from this chapter

Some individuals have indicated that the FASB must be cognizant of the economic consequences of its pronouncements. What is meant by “economic consequences”? What dangers exist if politics play too much of role in the development of GAAP?

Differentiate broadly between financial accounting and managerial accounting.

CA 1-4 (Financial Accounting) Omar Morena has recently completed his first year of studying accounting. His instructor for next semester has indicated that the primary focus will be the area of financial accounting.

Instructions

  1. Differentiate between financial accounting and managerial accounting.
  2. One part of financial accounting involves the preparation of financial statements. What are the financial statements most frequently provided?
  3. What is the difference between financial statements and financial reporting?

What was the Committee on Accounting Procedure, and what were its accomplishments and failings?

Explain the role of the Emerging Issues Task Force in establishing generally accepted accounting principles.
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