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Hi
I need examples of each to better understand this.
Principle vs rule based approach.
Any help would be much appreciated.
Thanks!
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There is a P1 technical article on the ACCA website titled ‘Rules, principles and Sarbanes-Oxley.’
I think you will find it useful.
I have read through it a few times, honestly I still find it hard to understand.
If you can by any chance explain a bit, I would very much appreciate it.
Just a brief idea at least.
Thanks
Below are some of my notes when I studied P1:
rule based:
Provisions are made / enforceable in law
Any breach is an legal offence
Limited latitude (assuming “one size fits all”)
“Box ticking exercise”
Quality of legislation is more important than degree of complianceprinciples based (“comply or explain”):
Explain when unable to comply (explain the areas of non-compliance and the reasons)
Allow latitude in compliance
Shareholders to judge for themselves the seriousness of breach
Allow more timely response
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