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K Week $4$ Formative Assessment $(0\%)$: Attempt review

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Shiksha BHATTARAI

'Accounting is merely a technical exercise and all accountants need to do is follow the rules'. Drawing on your understanding of accounting, discuss whether this statement is correct.

The statement "Accounting is merely a technical exercise and all accountants need to do is follow the rules" is an oversimplification of the role and nature of accounting. While accounting does involve technical procedures and adherence to rules and standards, it encompasses much more than just following a set of guidelines.

The nature of accounting is that it is not like a 'hard science' where there is one$-$correct answer. Although there are accounting standards that prescribe the accounting treatment for$-$specific transactions$/$events these often do not include 'black and white' rules. The$-$standards are primarily principles based requiring consideration of substance over form and the exercise of judgement in applying these.

What do we mean by corporate governance? What are rules based and principle$-$based standards to corporate governance? Write down their various advantages and disadvantages.