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Financial Reporting
(Assignment 1)

Name: Ali Ahmed Hulio

Roll No: 1947125

Program: BSAF-6

Date: 27/10/2022
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Accounting Standards and Their Importance

As the foundation of competent financial accounting policies and

practices, accounting standards are a clearly defined set of accounting
principles, regulations, and processes.
Accounting standards are a set of rules and procedures developed to
ensure that companies and other entities do bookkeeping and other accounting
tasks in a consistent manner across time.
All of an entity's assets, liabilities, revenues, expenses, and shareholders'
equity are considered in light of the applicable accounting rules.
Accounting standards are used by banks, investors, and government
organizations to ensure that the data they are relying on is reliable and accurate.

 Globally consistent accounting standards strengthen the credibility of

financial reporting. They provide the standards for how and when
economic events are to be recorded, quantified, and reported.
Accounting standards are used by the company's external stakeholders
(such as banks, investors, and regulatory authorities) to assure the
production of reliable information. Financial reporting measures and
transparency were both developed and guaranteed by these technical
announcements.

 Public and private businesses alike in the US adhere to GAAP, or

generally accepted accounting standards. International Financial
Reporting Standards (IFRS) are used by the vast majority of countries.
There are norms that all international organizations must adhere to.
Financial statements are prepared in accordance with international
accounting standards, which are created and interpreted by the
International Accounting Standards Board (IASB).
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Evolution of Accounting Standards in Pakistan and its Standard

Setting Bodies and Regulatory Bodies

The Securities and Exchange Commission of Pakistan notifies firms in

Pakistan of the appropriate accounting standards in accordance with the
Pakistani Companies Ordinance (1984).
The great majority of IFRSs have been adopted for obligatory
implementation by public corporations, banks, and other financial institutions,
as well as Economically Significant Entities (ESEs) that are not public firms, in
Pakistan.
In most circumstances, IFRSs are implemented in accordance with the
International Accounting Standards Board's standards (IASB)

 The Institute of Chartered Accountants of Pakistan (ICAP) is

responsible for regulating the chartered accountant profession in
Pakistan. Among its many responsibilities is the creation and
publication of auditing standards and the suggestion of accounting
standards for notice, or official adoption, in accordance with SECP
law. The Islamic Accounting and Finance Standards (IFAS) are being
developed by ICAP.

 Accounting standards can be issued by the SECP for any company,

not only those on public exchanges.

 Accounting and reporting standards for banks and specific types of

financial institutions are set by the SBP, which acts as the banking
regulator.
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 The International Financial Reporting Standards (IFRS) are widely

accepted in Pakistan, thus they must be used by publicly listed
companies, banks, utilities, and other large businesses. Companies
who claim to adhere to IFRS Standards as established in Pakistan have
omitted certain critical Standards from their practices. Further, IFRS 1
Initial Adoption has not yet been adopted in Pakistan.

 To be listed on a public exchange in Pakistan, an overseas company's

financial statements must comply with the International Financial
Reporting Standards (IFRS) in use in Pakistan.