3 Answers
The disadvantages of corporate accounting consist of the following:
- False or biased accounting information
- Greater focus on the monetary element
- Sometimes faces a situation of double taxation of profits
- Increases corporation cost
Corporate accounting is one of the most efficient tools in the corporate world, but despite this fact, it suffers from various limitations such as the non-adherence of accounting principles, the recording of cash flows only and ignoring depreciation, amortization, and other expenses that cannot be measured in cash, the manipulation of accounts or the entry of false information, and many more.
The main disadvantage of corporate accounting is that it only considers the cash elements and ignores the non-monetary aspects. Apart from this, it also fails to provide accurate information as the accounting information can be biased. Other disadvantages include the manipulation of accounts, ignorance of the time value of money, and ignorance of the principles of accounting.
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