I investigate how accounting standards and communication patterns between accoun-
tants affect uniformity and innovation in accounting practice. Prior accounting thought
suggests that accounting standards increase uniformity of practice at the cost of de-
creasing innovations in accounting practice. For example, the FASB claims that “one of
the most important reasons that financial reporting standards are needed is to increase
the comparability of reported financial information” and that consistency of practice,
while not identical to comparability, is helpful in achieving comparability (FASB state-
ment 8, 2010 pgs. 29 19). Others have expressed concern that accounting standards
reduce innovations in accounting practice (e.g. Sunder 2010). I investigate the alleged
trade off between uniformity of accounting practice and innovations in accounting prac-
tice by using an agent based simulation model inspired by Basu, Madsen, Reppenhagen,
and Waymire (2013, BMRW hereon). BMRW find that increased communication be-
tween accountants increases innovation, leading to better performance on a complex
task. I document a form of communication that leads to decreased performance on the
same complex task. With regards to standard setting, I find that accounting standards
not only reduce innovation in practice, but also reduce uniformity in practice under
some conditions. This is in contrast with the conventional wisdom that standards in-
crease uniformity in practice. The results suggest that efforts to implement accounting
standards for the sake of uniformity may be misplaced. The results also provide guid-
ance for when communication between accountants can improve (or harm) accounting
practice.