Consistency Reexamined.

Abstract Consider the proposition that the doctrine of consistency may be overused, misunderstood, misapplied, ill-defined, and not conducive to the development of accounting research. The special committee on Cooperations with Stock Exchanges of the American Institute of Accountants and the Committee on Stock List of the New York Stock Exchange concluded that effective accounting reports required consistency in the application of the methods of accounting from year to year. Possibly the best way to examine the doctrine of consistency is to ask why an entity should apply an accounting method on a consistent basis. Broadly, there appear to be two approaches to the objective of reducing the role of the doctrine of consistency in accounting practice. First the objective may be approached by applying the scientific method in developing and selecting criteria to be used in guiding the use of accounting methods. The second approach toward the objective of reducing the role of the doctrine of consistency in accounting practice would be to insert multiple measures in accounting reports leaving to readers the task of selecting the measure appropriate for his needs.