Many outside the United States claim that a problem with U.S. GAAP is that there are too many rules. They argue for principles-based accounting standards in which the broad principles of accounting are emphasized and less emphasis is placed on detailed implementation rules. Americans counter that IFRS may lack quality and rigor. Additional rules are necessary to provide adequate guidance to users. Required: 1. Explain the difference between principles-based and rules-based accounting standards. 2. What are the advantages of principles-based standards?

Many outside the United States claim that a problem with U.S. GAAP is that there are too many rules. They argue for principles-based accounting standards in which the broad principles of accounting are emphasized and less emphasis is placed on detailed implementation rules. Americans counter that IFRS may lack quality and rigor. Additional rules are necessary to provide adequate guidance to users. Required: 1. Explain the difference between principles-based and rules-based accounting standards. 2. What are the advantages of principles-based standards?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter1: Accounting As A Tool For Managers

Section: Chapter Questions

Problem 10MC: Which of the following statements is incorrect? The practice of management accounting is fairly...

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3. What are the advantages of rules-based standards? 4. Do you think that future international accounting standards will need to be more principlesbased or more rules-based? Many outside the United States claim that a problem with U.S. GAAP is that there are too many rules. They argue for principles-based accounting standards in which the broad principles of accounting are emphasized and less emphasis is placed on detailed implementation rules. Americans counter that IFRS may lack quality and rigor. Additional rules are necessary to provide adequate guidance to users.
Assume that the FASB is considering revising an important accounting standard.Required:1. What constraint applies to the FASB’s consideration of whether to require companies to provide new information?2. In what Concepts Statement is that constraint discussed?3. What are some of the possible costs that could result from a revision of an accounting standard?4. What does the FASB do in order to assess possible benefits and costs of a proposed revision of an accounting standard?
Answer the following: In detail, what's the benefit of accounting harmonization?Discuss how Standardization can reduce administrative costs?Illustrate one of the Statistical methods for the measurement of accounting harmonization in detail (by Research, will not be found in the book)
Which of the following is not about harmonization? Select one: a. Harmonization is a process of increasing the compatibility of accounting practices. b. Harmonization simply implies uniformity. A c. Harmonization is tailored towards breaking the barriers of national differences. d. Harmonization is a process of preparing financial statements.
Wayne Cooper has some questions regarding the theoretical framework in which IFRS is established. He knows that the IASB has attempted to develop a conceptual framework for accounting theory formulation. Yet, Wayne Cooper's supervisors have indicated that these theoretical frameworks have little value in the practical sense (i.e., in the real world). Wayne Cooper did notice that accounting rules seem to be established after the fact rather than before. He thought this indicated a lack of theory structure but never really questioned the process at school because he was too busy doing the homework. Wayne Cooper feels that some of his anxiety about accounting theory and accounting semantics could be alleviated by identifying the basic concepts and definitions accepted by the profession and considering them in light of his current work. By doing this, he hopes to develop an appropriate connection between theory and practice. Instructions: Help Wayne Cooper recognize the purpose of a…
(Conceptual Framework—General) Wayne Cooper has some questions regarding the theoretical framework in whichGAAP is set. He knows that the FASB and other predecessor organizations have attempted to develop a conceptual framework foraccounting theory formulation. Yet, Wayne’s supervisors have indicated that these theoretical frameworks have little value in thepractical sense (i.e., in the real world). Wayne did notice that accounting rules seem to be established after the fact rather thanbefore. He thought this indicated a lack of theory structure but never really questioned the process at school because he was toobusy doing the homework.Wayne feels that some of his anxiety about accounting theory and accounting semantics could be alleviated by identifyingthe basic concepts and definitions accepted by the profession and considering them in light of his current work. By doing this,he hopes to develop an appropriate connection between theory and practice. Instructions(a) Help Wayne…
Wayne Cooper has some questions regarding the theoretical framework in which GAAP is set. He knows that the FASB and other predecessor organizations have attempted to develop a conceptual framework for accounting theory formulation. Yet, Wayne’s supervisors have indicated that these theoretical frameworks have little value in the practical sense (i.e., in the real world). Wayne did notice that accounting rules seem to be established after the fact rather than before. He thought this indicated a lack of theory structure but never really questioned the process at school because he was too busy doing the homework. Wayne feels that some of his anxiety about accounting theory and accounting semantics could be alleviated by identifying the basic concepts and definitions accepted by the profession and considering them in light of his current work. By doing this, he hopes to develop an appropriate connection between theory and practice. Instructions a. Help Wayne recognize the purpose of…
Some argue that having various organizations establish accounting principles is wasteful and inefficient. Rather than mandating accounting rules, each company could voluntarily disclose the type of information it considered important. In addition, if an investor wants additional information, the investor could contact the company and pay to receive the additional information desired. Instructions Comment on the appropriateness of this viewpoint.
Which of the following statements is incorrect? Select one: a. Reports produced using management accounting must follow GAAP. b. The information gathered from management accounting is not required by law. c. The practice of management accounting is fairly flexible. d. Management accounting focuses mainly on the internal user.
Some argue that having various organizations establish accounting principles is wasteful and inefficient. Rather than mandating accounting rules, each company could voluntarily disclose the type of information it considered important. In addition, if an investor wants additional information, the investor could contact the company and pay to receive the additional information desired.
Which of the following statements is incorrect? a.Management accounting focuses mainly on the internal user. b.The information gathered from management accounting is not required by law. c.The practice of management accounting is fairly flexible. d.Reports produced using management accounting must follow GAAP.
Please answer this correctly. Thank you:) 3. Discuss why adherence by the accounting profession to a single, GAAP-based view is inappropriate.