Difference between rules-based and principles-based accounting standards

(A) Rules-based account statement system threadbare Rule-based systems be middling simplistic, consisting of little more than a set of if-then statements, but put up the pedestal for so-called nice systems which are widely utilise in galore(postnominal) fields. The conceit of an right system is this: the intimacy of an expert is encoded into the rule set. When un limited to the same data, the expert system AI will dress in a similar port to the expert. Rule-based systems are a relatively simple model that range word be neutered to any number of troubles, rule-based systems are really only practicable for problems for which any and all knowledge in the problem scene of action stern be written in the form of if-then rules and for which this problem area is non large. If thither are too many rules, the system can nonplus difficult to maintain and can suffer a motion hit. Rules-based accounting provide a list of detailed rules to hit out, the list of rules c learly tell you how to do and provide the just now format, no any professional judgments is needed. Advantages of Rules-based accounting standard (1)         The rules can subjoin the accuracy with which standard setters communicate their requirements and plus comparability. (2)         The rules increase verifiability for auditors and regulators and a related reduction in litigation.

(3)         The rules rock-bottom opportunities for pay management through judgments, can reduce the classification of impreciseness that lead to aggressive reporting choices by managements. Disadvantages of Rules-based accounting sta! ndard (1)         Rules-based system is problematic because those who want 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 follow instead of a list of detailed... If you want to fasten a full essay, order it on our website: BestEssayCheap.com

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