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Timeliness of Information

Accounting information to the management should be supplied in time and frequently so that
some rational decisions may be taken. If information is not supplied in time, it will obstruct the
quick decision making process of the undertaking.

Accounting Standards

History and Development of Accounting Standards
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The International Accounting Standards Committee (IASC) came into existence on 29 June 1973.
The main objectives of IASC are to develop the accounting standards. In India the Institute of
Charted Accountants of India (ICAI) had constituted the ‘Accounting Standards Board’ in April
1977 for developing the Accounting Standards

Meaning of Accounting Standards :
Accounting standards are the rules in written form that ensure the uniformity of Accounting

Standards, and provide guidance for the preparation, presentation and reporting of accounting
information.

Features/Characteristics/Nature of Accounting Standards :

a) Provide Guidance to the Accountants ;
b) Brings Uniformity;
c) Accounting Standards are flexible ;
d) Provide information
Advantages of Accounting Standards a) Helpful in bringing the uniformity b) Helpful in
improving the reliability of financial statements c) Helpful in resolving the conflicts among the
users of financial information.

Accounting Standards issued by the ICAI : Amendment is made recently in the section 211 of
companies act 1956. According to this amendment, the financial statements (Profit and Loss
Account and Balance Sheet) of a company should comply with the Accounting Standards. The
Council of the Institute of Charted Accountants of India has so far issued the following 32
Accounting Standards (AS).

Process of Accounting :
(1)Collecting and identifying financial transactions
(2) Recording
(3) Classifying
(4) Summarising
(5) Deals with financial transactions
(6) Analysis and Interpretation
(7) Communicates

Basis of Accounting : 1.Cash Basis of Accounting 2. Accrual Basis of Accounting