Accounting Standard
According the section 211 (3C) Accounting Standards means, Written accounting policy documents, issued or recommended by ICAI for covering the aspects of recognition, measurements, presentation & discloser of accounting transactions in the financial statements under the CA act 1949, as may be prescribed by the central government in constitution with the National Advisory Committee on Accounting Standards established under section 1st of 210(A).
Standards are a source of rule and order and generate stability. In failing to plan, we plan to fail. Lack of rule and order causes chaos and destruction.
The more consistently various organizations can line up their financial transactions with those of other organizations and reach the same data on the same format, the more efficiently commerce can flow and grow.
If you have 7 companies and each has a different format and a different set of data to be kept, and no two keeps the same categories of data, much less the in the same format, then they will have great headaches in attempting to do business together. This is the reason for standard bookkeeping practices, standard software and standard documentation. It is why courts have a standard for their operations, and it is why every business should have a stated standard for all its transactions and should attempt to arrange it to comply with the standards of its clients, customers, rivals, suppliers, vendors and affiliates.
The disadvantages are small and should be easily overcome by a competent staff. They are vastly outweighed by the advantages.
If you have a standard, then new staff must be trained to that standard. It also means that your staf must follow that standard and cant wing it.
To some extent it may even curtail creativity and affect productivity in the short term.
Accounting Standards