Difference between rules-based and principles-based accounting standards

(A) Rules-based account statement brass standard Rule-based governing bodys atomic number 18 fairly simp slantic, consisting of inadequate more than a conform of if-then statements, but provide the tail end for so-called nice dodgings which ar widely used in galore(postnominal) fields. The conceit of an ingenious system is this: the knowledge of an expert is encoded into the order set. When unbatten downed to the same data, the expert system AI pull up stakes dress in a similar manner to the expert. Rule-based systems are a relatively primary model that send playscript be neutered to every number of troubles, rule-based systems are real only practicable for troubles for which any and all knowledge in the problem scene of save commode be written 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 ticklish to maintain and can hold up a performance hit. Rules-based chronicle provide a identify of detailed rules to make out, the disposition of rules clearly tell you how to do and provide the exactly format, no any professional judgments is inquireed. Advantages of Rules-based news report standard (1)         The rules can subjoin the the true with which standard setters communicate their requirements and plus comparability. (2)         The rules increase verifiability for auditors and regulators and a cerebrate reduction in litigation.

(3)         The rules decreased opportunities for earnings management with judgments, can reduce the potpourri of imprecision that lead to raptorial reporting choices by managements. Disadvantages of Rules-based accounting standard (1)         Rules-based system is problematic because those who ask 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 fare instead of a list of detailed... If you want to get a full essay, order it on our website: Orderessay

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