Rule-based versus principle-based accounting


Question: Shenanigans book goes through seven "standard" techniques of misrepresentation for earnings and four for cash flow. Does Sarbanes-Oxley help prevent these situations? (i.e., why didn't Sarbanes-Oxley protect us from the financial sector melt-down?)

Also, one can discuss "how did these occur" in terms of rule-based vs. principle-based accounting. Would principles help reduce the incidence of shenanigans? Remember, moving to IFRS is intended to move us closer to principles-based accounting.

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Accounting Basics: Rule-based versus principle-based accounting
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