Auditing Theory Accounting

In accounting, there is a need to guarantee reliability, transparency, and consistency.
Accounting standards thus play a major role in ensuring that these principles are adhered to.
Accounting standards also work to ensure that all transactions are recorded uniformly and following the globally accepted standards. Ethics and professionalism are
important in any profession. To this end, it is important for the accounting profession to be
regulated and to ensure that all accountants adhere to the set duties. The role of accounting in
any business makes it important for regulations and standards to be put in place to ensure that
accounting is accurate and done professionally. International Financial Reporting
Standards (IFRS) are rules that help govern accounting and aid in the preparation of accurate
financial statements. IAS 1 is a standard that details how financial statements should be prepared
and in so doing helps accountants to practice ethically and professionally.
IAS 1 is a standard that defines how financial statements should be presented. According
to the standard, a business must prepare a statement of financial position at the end of every
period. A statement of profit and loss is also required (The International Financial Reporting
Standards Foundation, 2020). A statement of cash flows, as well as a statement of changes in
equity, are also important at the end of every financial year. IAS 1 helps companies maintain
financial statements that are comparable across the world (The International Financial Reporting
Standards Foundation, 2020). The standards guide accountants on how to maintain their
accounts. In putting standards in place, one can compare the performance of one business to the
other. IFRS also helps in ensuring that there is consistency in accounting language, and this helps
companies and investors to make informed financial decisions.

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IAS 1 ensures that accountants can discharge their duties within the legal framework, and
this helps accountants to maintain a high degree of ethics in the practice of accounting. There is a
lot of sensitivity that surrounds a company’s financials (Klimek & Wenell, 2011). As a result,
accounting ethics and rules are required in the preparation of financial statements. IAS 1guides
the preparation of financial statements and helps guarantee transparency in the preparation of
financial documents. IAS 1 helps accountants to distinguish between right and wrong. By
following the standard, accountants can make ethical decisions with ease (Mintz, 2011). IAS 1
helps to create the element of independence in accounting. By upholding the standard,
accountants are able to minimize errors and ensure that suitable information is captured in the
financial statements. IAS 1 also helps guarantee accurate financial statements. Users of financial
statements heavily rely on the accuracy of the statements (Mintz, 2011). To this end, IAS 1 helps
ensure that accountants uphold the ethical principles of preparing accurate financial statements
that can be relied upon by different users.
Overall, IFRS helps set up globally acceptable financial standards. IAS 1 helps define the
role of accounting in any organization by guiding the preparation of important financial
statements. IAS 1 helps accountants ensure that they act in line with ethical accounting
standards. By following the standard, accountants are able to prepare uniform financial
statements that can be used by various groups of people, including regulating agencies and
investors. Regulations provided by IFRS help accountants practice ethically.

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References

Klimek, J., & Wenell, K. (2011). Ethics in accounting: an indispensable course?. Academy of
Educational Leadership Journal, 15(4), 107.
Mintz, S. M. (2011). Ethics, professional judgment, and principles-based decision making under
IFRS. The CPA Journal, 81(1), 68.
The International Financial Reporting Standards Foundation. (2020). IFRS. IFRS.
Retrieved June 17, 2020, from https://www.ifrs.org/issued-standards/list-of-standards/ias-
1-presentation-of-financial-statements/