An argument to support the requirement that all companies over a certain size should adhere to accounting standards is:
A) Larger companies have greater political and economic importance and this increases the demand for financial information about the entity by external users.
B) Larger companies can afford to pay for complex accounting systems and the experts necessary to design and maintain them.
C) The conceptual framework and accounting standards are designed for larger enterprises.
D) The Australian Securities and Investment Commission should only be responsible for large enterprises.
E) All of the given answers.

Question

Quizplus · Accepted Answer

Larger companies have a significant impact on the economy and politics, and thus, stakeholders require financial information about them to make informed decisions. Accounting standards ensure the transparency and comparability of financial statements, which is essential in making these decisions. In addition, accounting standards provide guidelines for financial reporting that help prevent fraudulent activities and misstatements. Thus, it is necessary for all companies, especially larger ones, to adhere to accounting standards.

An Argument to Support the Requirement That All Companies Over