Recent Accounting Scandals Have Raised Concerns Over the Quality and Transparency

Essay

Recent accounting scandals have raised concerns over the quality and transparency of financial accounting and reporting in the United States.Critics of what is termed the "rules-based" system currently used in the U.S.cite the increasingly detailed and complex nature of rule-driven accounting pronouncements.These critics suggest that the United States should adopt a principles-based system similar to that of the International Accounting Standards Board.
Explain what is meant by a principles-based system and the advantages and disadvantages of such a system.