The Application of Substance Over Form Principle in Accounting Practice

Abstract

This paper systematically studies the application of the principle of substance over form in accounting practice. As the core principle of International Accounting Standards, this principle emphasizes the accounting based on the essence of economic business, which is of
great significance to improve the quality of accounting information and promote the convergence of international accounting. It is found that
this principle has wide application value in the recognition of accounting elements, selection of methods, preparation of statements and judgment of related parties, but it also faces problems in practice, such as abuse, resulting in information distortion and inadequate implementation
by practitioners. The root cause of these problems lies in the large space of professional judgment and the imperfect supervision mechanism.
To this end, it is necessary to improve the professional quality of accounting personnel, improve the supervision system and strengthen the
legal coordination to ensure that the principle is correctly applied and plays its due role.