A Study by the SEC Notes That Imperfections Exist When

Multiple Choice

A study by the SEC notes that imperfections exist when standards are established on either a rules-based or a principles-based basis only. The SEC recommends that standards should have all of the following characteristics except:

A) Enumerate exceptions from the standard.
B) Provide sufficient detail and structure so that the standard can be operationalized and applied on a consistent basis.
C) Avoid use of bright lines that allow structuring of financial transactions to achieve technical compliance while evading the intent of the standard.
D) Be based on a consistently applied conceptual framework.