Scope of Accounting Standard

Provide Accounting Norms

Accounting standards provide norms which serve as the basis for
preparation of financial statements of company. It gives a complete guide
for accounting processes to accountants. All transactions are recorded
and presented in account of business as per the guidelines provided by
accounting standards.

Conformity With Laws

These standards are formulated and issued in conformity with provisions
of all applicable laws, customs and business environment of a country. In
case, if any accounting standard is not found in conformity with any of the
law, then provision of such law will prevail over the accounting standard.

Ensure Reliable Financial Statements

Accounting standards ensure that financial statements prepared by
company deliver reliable information. These standards act as a dictator
which guide the accountant by providing the rules and format to be
adopted in preparing financial statements. When accounts are prepared
following these standards, reliability of information provided to user get
increased.

Act As A Harmonizer
Accounting standards acts as harmonizer for solving any conflict arising in
accounting process of organization. These standards are non-biased in
nature and aims at attaining uniformity in whole accounting procedure.
Diverse accounting policies and practices are avoided and standardized
concepts are provided by these standards. Therefore, when all accounting
process are uniformly followed then an accountant can easily provide
solution to any conflict arising on accounting issues.

Determine The Extent of Disclosure

These standards determine the extent to which financial information
should be disclosed by company in its financial statements. It ensures that
detailed information is provided in true and fair manner to all users of
accounting information. Availability of true accounting information in a
correct manner leads to strategic decisions.