Accounting standards refer to the rules and regulations that govern how financial statements are prepared and presented by companies. These standards ensure consistency and comparability in financial reporting, making it easier for investors, creditors, and other stakeholders to understand and analyze financial information. Accounting standards are typically set by governmental bodies, regulatory agencies, or professional organizations, such as the Financial Accounting Standards Board (FASB) in the United States or the International Accounting Standards Board (IASB) internationally. These standards cover a wide range of accounting principles and practices, such as revenue recognition, depreciation, and inventory valuation, to ensure transparency and accuracy in financial reporting. Compliance with accounting standards is essential for companies to maintain credibility and trust with investors and other stakeholders.