The usefulness of accounting standard in the preparation of financial statement

Project Abstract

Accounting standards play a crucial role in the preparation of financial statements as they provide a framework for recording, measuring, and disclosing financial information. These standards help ensure consistency, comparability, and reliability in financial reporting, which is essential for stakeholders to make informed decisions. By following accounting standards, companies can enhance transparency and trust among investors, creditors, and other users of financial statements. This research aims to investigate the usefulness of accounting standards in the preparation of financial statements by examining how adherence to these standards impacts the quality and reliability of financial information. The study will analyze the effect of accounting standards on the accuracy of financial reporting, the relevance of information provided, and the overall credibility of financial statements. Through a comprehensive literature review and empirical analysis, this research will explore the benefits of accounting standards in improving financial reporting practices and enhancing the transparency of corporate financial performance. By examining the experiences of companies that follow accounting standards closely compared to those that do not, this study seeks to identify the advantages and challenges associated with adopting these standards. The findings of this research are expected to provide valuable insights into the significance of accounting standards in the preparation of financial statements and their impact on the decision-making process of stakeholders. By understanding the role of accounting standards in promoting transparency and accountability, companies can improve their financial reporting practices and build trust with investors and other users of financial information. Overall, this research contributes to the existing literature on accounting standards and financial reporting by highlighting the importance of adhering to these standards in ensuring the reliability and relevance of financial statements. By emphasizing the benefits of following accounting standards, this study aims to encourage companies to adopt best practices in financial reporting and enhance the quality of information provided to stakeholders.

Project Overview

<p> </p><p><strong>INTRODUCTION</strong></p><p>As a result of increased commercial activities through out the world, many big business expand beyond their countries to have a share of the world market.<br>Therefore, established branches are translated accordingly based on exchange rates existing and at the end set of financial statements are prepared and published.<br>In preparing these financial statement normal accounting practices and procedures must be followed and a number of legal and other requirement observed.<br>In the international market, it was observed that it was possible for accounting policies to differ in one single transaction.<br>For instance, in a group involving foreign subsidiaries, the method of valuing stock may not be same if the Nigerian company for example use last – in – first – out (LIFO) and the other seas company uses first – in – first – out (FIFO) the result will differ.<br>In addition to accounting policies reporting formats and disclosure requirement may not be the same there is therefore the need for accounting policies and disclosure requirement to be international comparable and acceptable.<br>Accounting standard like, internationally accounting standard (IAS) statement of standard accounting practices (SSAP) financial reporting standard etc.<br>Constitute a set of definitive principle to be followed when preparing financial statement departures from principles and practice enunciated in these standard are permissible in exception circumstance only where adherences would fail to give a true and fair view in a specific instance or because the accounting standard world be obviously inappropriate or because exemption from disclosure is spanted by status.<br><strong>1.1 STATEMENT OF PROBLEM OF ACCOUNTING STANDARD’S</strong><br>Nigeria accounting standard board has issue statement of accounting standard which has compliance with international accounting standard.<br>The following standards has been issued in Nigeria and each of them has a particular IAS it complies with<br>SAS 1 – disclosure of accounting policies</p> <br><p></p>