Why does accounting profession adopt and follow agreed accounting concepts and standards?

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1224384

2026-03-12 03:05

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The main reason this is done is so there is some level of comparability between companies. There are many different ways that companies could account for different things such as inventory expenses, revenue recognition, leases, assets, etc. Having a set of standards makes it slightly easier to understand what a firm is doing, by limiting what they are allowed to do, conceptually speaking.

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