Accounting standards are guiding principles that determine the way in which companies must report transactions and prepare their financial statements. For example, there needs to be consensus regarding things like when a company can recognize a sale as income in their financial statements. Is it when the customer order has been placed or when it has been delivered, or maybe when the cash has been received? Another example is the measurement of balances. When an asset is put on the balance sheet, should it be put on the balance sheet at the amount that was paid for it, what the company thinks they can sell it for, or what they perceive the benefit of it to be. These standards play a critical role in ensuring consistency, transparency, and comparability in financial reporting across companies and countries. Auditors are individuals or firms authorized to review and evaluate a company's financial records. They play a crucial role in providing independent assurance to stakeholders such as investors or creditors. Regarding the reliability of the financial statements, public companies require an annual audit, and the primary goal of an audit is to ensure that the financial statements fairly present the financial position operating results and cash flows in accordance with the relevant accounting standards. The standards are set by standard setting boards, and depending on the jurisdiction, companies may adopt different sets of accounting standards. While some countries have their own accounting standards, many have adopted International financial reporting standards, or IFRS are developed by the International Accounting Standards Board, the IASB, and are a globally recognized set of standards. They are used by companies in more than 140 jurisdictions, and the IFRS website actually describes them as a global accounting language. In the US, generally accepted accounting principles or US GAAP is predominantly used. US GAAP is closely aligned to IFRS. However, there are differences in certain areas. For example, leases. IFRS and US GAAP have some general guiding principles, but there are also standards on specific areas like accounting for business combinations, financial instruments and leases. For example, leases are dealt with in IFRS 16 and for US GAAP ASC842, A company will disclose which accounting standards they have used in the preparation of their financial statements as well as the key accounting policies. The accounting standards are not black and white rules, and so it is necessary for companies to give more information in certain areas, for example, over what period they write off their various types of assets.