Discuss the advantages & disadvantages of Accounting standards

The advantages of accounting standards include:

1. Improved comparability between financial statements prepared by different businesses

2. reduced costs to users and preparers different accounting policies and definitions because there are fewer choices to make.

The disadvantages of Accounting Standard include:

1. Some choice is often still allowed (so it is still difficult to compare financial statements prepared under different accounting policy choices)

2. If there is no choice at all, some businesses may be forced to apply inappropriate accounting policies

3. It is usually hard to write accounting standards so that unscrupulous businesses cannot still find a way to manipulate or abuse the rules in order to mislead readers

4. The economic and reporting environment is changing so rapidly that new accounting standards (or changes to old ones) are always being required

5. New standards may be inconsistent with old standards

6. It can be so difficult to get everyone to agree on a new accounting standard that compromises have to be made.