Accounting standards are rules governing the organization in managing the financial accounting and preparing financial reports. Accounting standards, directly or indirectly determine the content, scope and form of financial statements of the financial report.
Accounting standards allow the comparison of the financial statements prepared in accordance with the same accounting standard for different periods or different companies. Such financial statements are required by banks when applying for a loan or by stakeholders.
All (larger) companies are obliged to keep accounts and prepare their financial reports according to national accounting standards of the country, in which they operate.
For the continental model of accounting regulation, it is characteristic that these standards are part of the legislation of the country and are more tied to tax and business law. On the contrary, the Anglo-Saxon model is characterized by the regulation by professional standards issued by private organizations.
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