Knowledgeable Users of Financial Statements Recognize That the Numbers Reported

Essay

Knowledgeable users of financial statements recognize that the numbers reported in a company's financial statements depend on the accounting policies used to generate the numbers.Various choices of accounting policies exist,such as LIFO vs.FIFO for inventory costing and straight-line vs.double-declining balance for depreciation.APB Opinion No.22 requires that a company disclose the accounting policies used to ensure that statement users have the information they need to make sound decisions.
What problems arise from the large variety of accounting choices available?