Need and Development of Accounting StandardsAccounting is the language of a business which communicates the financial performance of the business to various users. It has to exhibit a true and fair view. If the financial accounting process is not properly regulated, then the financial statements may be misleading and may provide distorted picture of the business. There were different accounting concepts, conventions, customs, rules and practices prevailing in different nations, leading to misunderstanding, uncertainty and resulting in scandals and confusions.
In order to ensure a true and fair view, transparency, consistency, comparability and reliability of financial reports, a standardised set of rules and accounting principles were required. The International Accounting Standards Committee (IASC) came into existence on 29th June 1973 with 16 accounting bodies from 9 different nations to develop Accounting Standards.