Situation have also been identified with

accounting standard overload :

Too many standard
Too detailed standard
No rigid standard, making selectivity of
application difficult
General purpose standards failing to provide
for differences
Excessive diclosures, complex measurement,
or both
 Financial reporting should provide
information that is useful to present and
potential investors and creditors and other
users in making rational investment, credit,
and similiar decisions. The information
should be comprehensible to those who have
a reasonable understanding of business and
economic activities and are willing to study
the information with reasonable diligence
 The large number, narrowness and rigidity of
accounting standards can have serious effect
on the work performed by accountants, the
value of financial information to users and
business decisions made by management. The
accountants may lose sight of their real jobs
because of the excessive data required when
complying with existing standards. Audit
failures may result, because the accountant
may lose the focus of the audit and may
forget to perform basic audit procedures.
The AICPA Special Comittee on Accounting Standards
evaluated the following possible approaches to dealing
with accounting standards overload :
1.No change; retain status quo
2.A change from present concept of set of unitary GAAP
for all business enterprises to two sets of GAAP, thus
creating a separate set of GAAP for certain entities,
such as small nonpublic business
3.Changes in GAAP to simplify application to all business
enterprises
4.Establishing differential disclosure and measurement
alternatives
5.A change in CPA’s standards for reporting on financial
statements
6.An alternative to the GAAP as an optional basis for
presenting financial statements.
The approach that relies on an alternative to
the GAAP rests on three possibilities :
1.A new basis accounting method (BAM)
2.The cash or modified cash basis
3.The income tax basis