Why Does the IASB Believe That a Principles-Based Approach to Standard

question 12

Multiple Choice

Why does the IASB believe that a principles-based approach to standard setting is superior to a rules-based perspective?

• A)Detailed prescriptions or rules encourage accountants to look for ways to circumvent the rules rather than trying to provide useful information.
• B)Principles-based standard setting is less costly to undertake than rules-based standard formulation.
• C)It is desirable to have all corporations in all countries using the same accounting practice.
• D)A conceptual framework for standard setting has been demonstrated to encourage the greatest economic development.

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