Accounting policies are the set of guidelines that have been established to prepare and issue a financial statement of a company , which can be adapted to the various types of activities that are carried out by it.
Through this methodology, the significant increase in quality that the organization will receive throughout its growth can be guaranteed , which is an indispensable factor in perfecting its work.
These accounting policies are subscribed to a set of documents that must be prepared, analyzed and evaluated by each of the accounting entities that make up the company.
Although this is a procedure that a set of parameters must follow to ensure its legality, they have other functions that are significantly important to the company.
So if you need help to know the importance of applying this type of policies within the transactions of an organization, keep reading to learn a little more.
On which documents should the accounting policies be applied?
Accounting requires a very broad group of reports that sign each of the financial transactions that have been issued by the company.
This is done in order to keep track of the investment and the degree of profits that are obtained throughout these negotiations, in order to know if each of these activities is profitable for it.
In addition to enabling the exponential growth of the same, the accounting policies are in charge of guaranteeing that the economic aspect related to the organization remains within the legal framework established by the International Financial Reporting Standards, also known as NIFF.
In this way, any operation that is directly related to the capital of the company, such as inventory expenses, payments, materials, profitability, savings, investments and other documents, must be handled under these laws.
The application of accounting policies is significantly beneficial for companies
Carrying the responsibility of monitoring the accounting of an organization is an important task that is carried out by a group of financial professionals.
Each of these people is in charge of daily reviewing the transactions that have been carried out by the company , in order to capture them in a document, which will later facilitate the execution of a control of expenses and investments.
Due to this, the occupation of each of these professionals is essential for the company in question, because through their work they will be able to receive the following benefits:
Assertive documentation availability
Accounting is a financial area that is constantly subject to audits, since, due to accounting policies, the assertiveness of each of the data reflected in the documents must be evaluated.
For example, when comparing accrued interests with those that are acquired through income , a total value must be shown that is similar to the monetary amount established by the accountant, since both aspects are taken into account to make financial estimates.
Its application is constant
As it is a legal framework on which systematic audits will be carried out at relative time intervals, the accountant must apply these accounting policies throughout the entire document .
This is because these laws are only a guide to apply the principles on which accounting is based , so that each of its parameters are correctly complied with.
Ensures efficiency
In addition to allowing the constant legal application of its principles, this policy also ensures the efficiency of the task that is being carried out , since the accountant cannot leave the framework on which they are based.
At the very least, when establishing the numbers related to monetizations, such as cash in hand and petty cash , the accountant must ensure that the content of both aspects is reflected correctly, so that he can facilitate his work through simple operations and allow the flow of each of the financial transactions that are issued by the company.
