ACCOUNTING TERMS - ACCOUNTING DICTIONARY - ACCOUNTING GLOSSARY
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PRINCIPLES-BASED ACCOUNTING Definition
PRINCIPLES-BASED ACCOUNTING provides for few exact rules and little implementation guidance. Instead, general principles are put forward and companies must ensure that their financial statements fairly and accurately represent these principles. Proponents argue that this type of system does not allow for less than ethical financial engineering, where complex transactions are undertaken in order to get around following specific rules-based accounting standards. Critics believe a principles-based system allows too much leeway for companies, because they generally do not have to follow specific rules, only wide-arching principles. See also RULES-BASED ACCOUNTING.
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SENSEX is a Bombay Stock Exchange Index (BSE 30-Share Benchmark Sensex Index).
IMPLEMENTATION OF INTERNAL CONTROL means the auditor determines that the relevant controls exist and that the entity is using them.