i. Accounting Standards: These are common sets of principles and procedures that define the basis of financial accounting policies and practices. They apply to the whole spectrum of an entity’s financial picture, including assets, liabilities, revenue, expenses, and equity. They are authoritative statements of how particular types of transactions and events are reflected in the financial statements.

ii. Purpose of Accounting Standards:

• Improve the reliability of financial statements: They provide a consistent basis for financial reporting, making the statements more reliable for users.
• Allow for inter-firm and intra-firm comparisons: Accounting standards enable stakeholders to compare the financial performance and position of different firms and track a firm’s progress over time.
• Ensure uniformity: They help in maintaining uniformity in the preparation of financial statements across different organisations within the same industry.
• Enhance transparency: Standards ensure that financial statements are prepared transparently, adhering to established rules and principles.
• Facilitate interpretation: They allow for the effective interpretation of financial statements by users, aiding in informed decision-making.
• Provide a framework: Accounting standards provide a structured framework for the preparation and presentation of financial information.