How rule-based accounting differ by principle-based standard


Problem: Explain how 'rules-based' accounting standards differ from 'principles-based' standards. How might fundamentally changing accounting standards from bright-line rules to principle-based standards help prevent another Enron-like fiasco in the future? Are there dangers in removing bright-line rules? What difficulties might be associated with such a change?

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Accounting Basics: How rule-based accounting differ by principle-based standard
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