Question

Critically analyze the arguments used for and against the regulation of financial reporting through accounting standards

Answer 1

Answer)

The arguments for regulation of financial reporting through accounting standards is that it acts like a guide when it requires and keeps all the accounts of different entity in line in critical situation like foreign currency etc which will be makes user understanding as such financial statements easy.

But there are also arguments which are aganist such accounting standards saying that it is costly and difficult affair for relatively small size businesses and also it may lead in presentation of poor profit in certain times due to following such standards.Moreover there are arguments saying that it can be modified by lobbying politicians.

Regardless the damages they made to small business,for decent size entities Upto my opinion they are more useful than harmful as it is prepared by experts they must be used while financial reporting so that every users whether the investor or lender or even for taxation purpose can easily understand such Accounting standards than understanding the assumption which they use.Moreover it helps a lot for accountants as it acts like a gps in dealing certain issues.