What is Uniformity in Accounting?

Uniformity is the practice of requiring organizations to record accounting information and prepare financial statements in accordance with a relevant accounting framework. By requiring strict adherence to an accounting framework, every entity in an industry should report financial information in the same way. With identical preparation methods in place, it is possible to reliably compare the financial results of large numbers of companies.

Uniformity Failures

The uniformity concept does not always work, since some managers like to stretch the accounting rules to improve their financial statements. For example, a manager wants to report an unusually high profit level in order to earn a year-end bonus. By convincing the company controller to reduce the size of the allowance for doubtful accounts, this creates a modest improvement in the reported profit level that allows the manager to attain the bonus payment threshold. Thus, personal considerations can result in ongoing breaches in the uniformity concept.