Answer
It isn't suitable to surrender compulsory accounting standards and enable each organization to reveal the sort of data it considers important deliberately. Without a coherent group of accounting theory and standards, every accountant or entity would have the role to create its theory structure, set of practices, and users of financial statements would need to acquaint themselves with each organization's accounting and reporting practices. Therefore, it would be relatively difficult to understand and prepare comparable statements.
Moreover, voluntary disclosure may not be an effective method for presenting information. An organization is more likely to present less information on the chance that it has the attentiveness to do as such. Thus, the organization can easily diminish its expense of gathering and dispersing information. Nonetheless, an investor or government operative wishing extra info would be required to pay to get it. Different entities might be interested in various kinds of information. Since the organization may not be prepared to give the requested info, it would need to spend extra resources to satisfy such needs; or the organization may decline to outfit such data if it's too expensive. Subsequently, investors may not get the ideal info, or they may need to pay a lot of cash for it.
Work Step by Step
Organizations may also doctor their sales/income reports, therefore, paying less tax than they were initially supposed to. This may decrease government income and have adverse effects on the economy of a country.
