Failure to understand the interaction of accounting standards can have several negative impacts on financial reporting and beyond. Here are some possible consequences:

1. Inaccurate Financial Statements: If the interaction of standards isn't correctly understood, it could lead to inaccurate financial statements. For example, misinterpreting how revenue recognition and lease accounting standards interact could lead to incorrect reporting of revenue or lease liabilities.
2. Non-compliance with Regulatory Requirements: Accounting standards are often legally enforceable, particularly for publicly traded companies. If an entity misapplies accounting standards due to a misunderstanding of their interaction, it could be in breach of regulatory requirements, leading to penalties or sanctions.
3. Misleading Financial Analysis: Financial ratios and performance metrics could be distorted if accounting standards aren't applied correctly. This could mislead investors, lenders, and other stakeholders, leading to poor decision-making.
4. Auditing Challenges: Auditors need to verify that financial statements comply with all applicable accounting standards. If standards aren't applied correctly, it can lead to auditing challenges, possibly resulting in a qualified audit opinion or additional audit costs.
5. Reputational Damage: If a company has to correct its financial statements due to errors in applying accounting standards, it can suffer reputational damage. This might lead to a loss of confidence from investors, customers, and the wider public.
6. Increased Risk: Misunderstanding the interaction of accounting standards could increase financial reporting risk. This might necessitate more complex and costly controls to mitigate this risk.

In summary, it's vital to understand how accounting standards interact to ensure accurate, compliant, and insightful financial reporting. Failing to do so can have serious financial, legal, and reputational consequences.