Theory base of accounting
The accounting information must be reliable, relevant and comparable for the effective functioning of business. This is possible only when the information in the financial statement provides uniformity accounting policies, principles and practices.
This calls for theory bases of accounting. It consists of accounting concepts, convention, assumption, principle etc. for the purpose of uniformity approach in the accounting process.
In order to bring consistency in the accounting practices, the Institute of chartered accounts of index set up Accounting standard board.