Accounting standards are an integral tool for ensuring that credible financial statements are prepared for the benefits of the outside stakeholders. There is a debate in the accounting world regarding the merits and demerits of principles versus rules-based accounting standards. Although clearly defined principles provide many advantages as a basis of accounting, there is also concern that principles-based standards enable managers to manipulate accounting information.

In answering this question, you will consult resources regarding the benefits and disadvantages associated with the principles-based standards. Your assignment will primarily be evaluated on how well you provide a critical evaluation of the principles based accounting standards. Critical evaluation requires you to state your conclusion based on logical arguments for and against a particular idea. You should provide your opinion in a coherent manner. Although we dont expect students to conduct rigorous research in answering this question, some research evidence would yield higher marks Required:

Question: Provide a critical evaluation of the accounting standard-setters move towards a principles-based reporting regime.

[C] Critical evaluation of the key issues using some research evidence [8 marks]

[Comprehensive coverage of academic research is not required] [L] Logical development of arguments and flow of discussion [4 marks]

[SC] Summary and conclusion [3 marks]