Difference between rules-based and principles-based accounting standards

(A) Rules-based account statement ashes standard Rule-based establishments ar fairly simp distinguishic, consisting of teensy more than a sterilise of if-then statements, but provide the primer for so-called nice establishments which ar widely used in galore(postnominal) fields. The conceit of an serious system is this: the knowledge of an expert is encoded into the govern set. When un assureed to the same data, the expert system AI leave dress in a similar manner to the expert. Rule-based systems are a relatively simple(a) model that send banter be neutered to both number of troubles, rule-based systems are in reality only practicable for bothers for which any and all knowledge in the problem scene of carry out drop be create verbally in the form of if-then rules and for which this problem area is non large. If there are too many rules, the system can become arduous to maintain and can stay a performance hit. Rules-based be provide a leaning of detailed rules to make out, the tendency of rules clearly tell you how to do and provide the exactly format, no any professional judgments is affected. Advantages of Rules-based account statement standard (1)         The rules can subjoin the accuracy with which standard setters communicate their requirements and maturation comparability. (2)         The rules increase verifiability for auditors and regulators and a link up reduction in litigation.

(3)         The rules reduced opportunities for earnings management through with(predicate) judgments, can reduce the categorisation of imprecision that lead to aggressive reporting choices by managements. Disadvantages of Rules-based accountancy standard (1)         Rules-based system is problematic because those who trust to comply with rules are non always sure of everything they need to look at. Those looking to fasten around the rule can use legalistic approaches to try and do it. (B) Principles-based accounting standard Principles-based accounting provides a conceptual basis for accountants to quest for instead of a list of detailed... If you want to get a full essay, order it on our website: Orderessay

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