Why is sign?extension an important issue when we use a LDR instruction to load a register from memory, but of no importance when we use an STR to store a register in memory?

What will be an ideal response?

Data operations take place on the whole 32 bits of a register. If you load an 8 bit sign integer you have to sign extend it to 32 bits. Otherwise, the later 32?bit arithmetic would yield an incorrect value if you loaded a negative number. Memory has no concept of signed and unsigned; it just holds bit patterns.