consistency principle

Definition

Basic accounting concept that once an accounting method is adopted, it should be followed consistently from one accounting period to the next. If, for any reason, the accounting method is changed, a full disclosure of the change and an explanation of its effects on the items of the financial statements must be given in the accompanying notes (footnotes). One of the duties of an auditor is to make sure the consistency principle is being followed because, otherwise, any change might make interpretation of the financial data a futile exercise. Also called consistency concept. See also accounting concepts.