Disadvantages of Consistency Concept
1. Complexity: Especially for international firms operating in various regulatory contexts, aiming for uniformity across several accounting standards, countries, or business sectors may bring complexity and administrative difficulties.
2. Errors That Are Overlooked: Maintaining uniformity may make it more difficult to spot and fix deviations from accepted standards, which could result in the continuation of mistakes in accounting procedures.
3. Obsolete Practices: Continuously sticking to old accounting standards out of consistency may result in the application of procedures that are no longer appropriate or useful in fairly portraying the state of the company’s finances or performance.
4. Lack of Flexibility: Companies may find it more difficult to adapt to unusual situations that call for a departure from regular accounting procedures if they maintain consistency. This could result in financial reporting discrepancies.
5. Problems with Comparability: While consistency helps with comparability over time, it can make it more difficult to compare various businesses or industries if strict adherence to standard procedures masks significant variations in financial performance or status.
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