IFRS Tends to Be More Principles-Based Compared to GAAP Which

question 30

Multiple Choice

IFRS tends to be more principles-based compared to GAAP which is viewed as more rules-based.Which of the following is a true statement about a principles-based system?

• A)A principles-based system eliminates the need for internal controls
• B)A principles-based system is significantly weaker than a rules-based system
• C)A principles-based system will eliminate all fraud
• D)A principles-based system is a way to calculate interest receivable or payable
• E)A principles-based system depends heavily on control procedures to reduce the potential for fraud or misconduct.

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Definitions:

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