Accounting Policies

Exam code: 7707

Written by: Ashika|Reviewed by: Caroline Carroll|Updated 2 July 2026

Accounting Policies

Accounting policies

What are international accounting standards?

The international accounting standards are set by the International Accounting Standards Board
- These detail the standards for the financial statements
The main purpose of following the international accounting standards is for:
- Comparability
- Relevance
- Reliability
- Understandability

Policy	Description
Comparability	The information for one financial period should be presented in a way such that it can used for comparisons The information should be able to be compared with information from a previous period The information should be able to be compared with information from a different business
Relevance	The accounting information should be provided in a timely manner so that it is relevant to the users Financial decisions affecting the future of the business should be able to be made from the information
Reliability	The users of the data provided by the financial statements should be able to rely on the information provided The information should be objective and free from bias, opinions and significant errors The information should be capable of being independently verified
Understandability	The accounting information provided should be clear so that users can easily understand it It can be assumed that the users have a reasonable understanding of accounting terms

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