Rules and regulations evolve to bring order to chaos. Traffic laws were born from chaos on the roads. Cybersecurity laws to control the growing risks of the digital world. Accounting, too, once had its share of disorder. Each company followed its own logic, leaving no room for comparability or consistency. As businesses multiplied, so did confusion. To restore order, a common set of rules, the accounting standards, came into being, and later, the Indian Accounting Standards (Ind AS) aligned with international norms. They guide how financial statements are prepared and ensure that results are consistent across companies and across time. But the fact is that flexibility in the accounting laws has been misused to the maximum possible extent. While it is not easy to find such manipulations, if one looks at some critical things, it is also not that difficult.
