Principles versus rules

The Institute of Chartered Accountants of Scotland has published a paper Principles not Rules: A Question of Judgement. It expresses the view that the ever-increasing volume of accounting rules is not sustainable, especially during the process of global convergence of accounting standards. Maintaining and adhering to a large, complex set of accounting rules creates insurmountable problems for standard setters, preparers of financial statements, auditors and users. The paper explores how a principles-based approach serves the public interest, meets the needs of responsible enforcement and shows sensitive awareness of diversity in environment and culture.