posted by Avatar on May 25
The set of accounting principles may be basic and elementary but the rules governing their use and creation must follow internationally approved standards. This allows global trade to go on regardless of geographic location. These principles are revised and deliberated on, by a board of accountants who represent the majority of the countries who participate in the standardization of these practices on a daily basis. Changes are made and adjustments to the rules are drafted, presented and deliberated on by the representatives to ensure that the principles are evolving with the current status of the global economy. Incidents that involve loopholes are plugged by amendments and new requirements such as the “Sarbanes and Oxley Act” of 2002 which were implemented in the US to prevent further taking advantage of loopholes in the existing set of principles making it relevant to modern financial markets.