International Accounting Standards

by Isabel Prontes; Updated July 27, 2017

International accounting standards are the previous set of standards that regulated how specific transactions should be noted in financial statements. International accounting standards are generally abbreviated as "IAS" and were first established by the Board of the International Accounting Standards Committee (IASC). However, in 2001 a newer set of standards, called the international financial reporting standards were put into place by the International Accounting Standards Board.

Significance

Accounting standards are important because, for financial reporting, they ensure reliable, consistent and relevant information. Accounting standards must be governed by an infrastructure that watches over and makes sure that the standards are properly interpreted and followed.

Monetary and Financial Policies

The code of good practices on transparency in monetary and financial policies revolves around public availability of policy information, clarity of objectives, responsibilities, and roles, procedures for policy-decision formulating and reporting, and also assurances of integrity and accountability.

Fiscal Transparency

The code of good practices on fiscal transparency has four main principles under the International Accounting Standards, which are public availability of information, clarity of responsibilities and roles, independent assurances of integrity, and also open budget preparations, execution and reporting.

Auditing

The international standards on auditing focus on the fact that more consistency, comparability and transparency is necessary in order to keep up with increasing cross-border capital movements. The body of standards for auditing concentrates on audit evidence, internal controls, planning, responsibilities, international auditing practice statements, external auditors and much more.

Insurance Core Principles

Under International Accounting Standards, insurance core principles were put into place to garner ethical and practical supervisory practices for insurance–internationally. These principles were also established in order to build a framework and infrastructure to come up with more detailed insurance global standards.