Accounting

Company Financial Accounting and Reporting Is Regulated by a Variety of Sources

Earlier, in the absence of a fixed set, various organizations followed their own practices framed according to their own convenience. This dissimilarity in the accounting policies resulted in various problems and thus made it imperative to develop and amend the accounting standards after analyzing the international accounting standards and external environmental factors. All the listed companies were asked to follow these accounting standards for maintaining their accounting transactions and developing financial reports. These accounting standards were introduced to enhance the credibility and reliability of the financial statement developed by the listed companies of a nation. All the listed companies were asked to follow these accounting standards for maintaining their accounting transactions and developing financial reports. These accounting standards were introduced to enhance the credibility and reliability of the financial statement developed by the listed companies of a nation. Like other developed nations, the accounting standards were formulated in the UK in the early 1980s. People identified the necessity of a well-structured accounting standard that assures relevance, reliability, comparability and understand-ability in the financial report that is developed by the listed companies (Kirk, 2005, p.9). In the UK, the accounting standards are popularly known as Financial Reporting Standards (FRS). These FRS were developed by Accounting Standards Boards (ASB) and all the listed companies are required to adhere to these standards so that a true and fair picture of the companies’ financial condition can be represented. Prior to 1990, the accounting standards were developed by the Accounting Standards Committee (ASC) which was later replaced with Accounting Standards Boards (ASB). In the first meeting of ASB, it formally accepted all the accounting standards prevailing in UK GAAP. With time, this board introduced a few new standards and modified many existing standards.

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