This discussion revolves around the idea that IASB standards tend to be more principle-based and FASB standards tend to be more rules-based. Review the sections on IASB and IFRS (p. 541) and FASB-IASB Convergence (p. 550) in your textbook. In spite of the convergence project between the two, there is concern that the ISAB will become more rules-based.

• In light of events in the US such as the Enron scandal, passage of SAR_BOX, and the collapse of the large lenders, banks, and brokerage houses more recently, what do you think the benefits and hindrances are of a rules-based versus principles-based approach to Standards Setting?
• Given our move to a more global economy, what do you think the benefits would be for establishing common standards?
• What are the things that are hindrances or challenges to doing that?

Advanced Accounting Book 13ed. ISBN 9781259444951