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 CPAs 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