Study of disclosure of accounting policies and accounting standards by the banking companies of Yemen and India and its impact on the users

Abstract

First Chapter: Introduction 1.1 General introduction The evolution of Accounting, as with environment evolution, has lead to the appearance of mores, principles and rules engrained in practicing till some of them became acceptable by accountants such as double entry. But many of these mores, principles have many alternatives, and there is no agreement on following one alternative only. This has lead the disclosure being given the same treatment in different ways. This in turn has made it difficult to compare the companies’ financial statements; it may lead to adducing untrue data about the finance position and the profit or loss. So the need for establishing Accounting Standards has became essential, by which the comparison will be easy and it will reduce the chance of misrepresentation of data. With this view in mines some of the professional Associations started to set standards in the local ambit. In recent centuries the increased investment has increased the trade between the countries, as well as the multinational companies. This makes a case for conjunction in international economic relationships, and accounting patterns. Political changes have increased the conjunction of such relationships which had first appeared in the world in the ninth century and have support the enforcement of globalization of stock exchanges. All of that has had an influence on the evolution of accounting from two sides on the one hand the importance of accounting data has been increased by the people who deal with international stock exchanges from one side, and the users of accounting data have increased locally and internationally from the other side. This lead to thebeginning of establishing accounting standards which will be flexible for local or internationaluse. Thus the territorial, continental and international authorities have been established to make these standards. Enthoven said that the important steps for internationalization of accounting have been achieved by establishing the International Accountants Association, International Accounting Standards Committee and Europe Economic Corporation (Enthoven, 1983:110). Some of the undeveloped countries have started using standards which have been issued by International Accounting Standards Committee as Local Standards or use it as a base while formulating their own Standards. To ensure proper understanding of financial statements, it is necessary that all significant accounting polices adopted in the preparation and presentation of financial statements should be disclosed.