International Accounting Standards (IAS) refers to a certain level of quality which should be adhered to while drawing financial statements. The older set of standards, issued by the International Accounting Standards Committee (IASC), was formulated in 1973 through a consensus of the professional accountancy bodies from Australia, Canada, France, Germany, Japan, Mexico, Netherlands, United Kingdom, Ireland and the United States of America. The IASC passed a substantial number of standards, interpretations and other guidelines which were adopted by many companies in coming up with national accounting standards.
The organisational structure of the IASC was changed in 2001, leading to the formation of the International Accounting Standards Board (IASB). The changes came into play on 1st April in the same year
In a memorandum of understanding between IASB and the International Federation of Accountants, the objectives of the board include coming up with financial reporting standards with an aim to advance financial reporting and monitor the strict implementation of these standards. The setting of these standards will aid in decision making by investors and other players in the global capital market.
It also enhances the transparency and integrity of financial reporting. A transparent system which runs with integrity helps to boost the investors’ confidence in the information provided to him
This will, in turn, lead to financial stability and tremendous economic growth. It also improves the accountability of entities to their stakeholders.