Appraisal on the Transformation of Accounting StandardSetting Basis in the United States
LI Gui-rong · Economy & Audit Study · 2004
After Enron scandal, in order to improve the quality of financial reporting, the United States replaced rulebased model for principlebased model to set accounting standards. The accounting standards based on the rules have many defects, but the principlebased model can overcome the defects brought about by rulebased model because the principlebased model stresses the application of accounting principle and the professional judgment.So the principlebased model have some flaws too, it needs related conditions in which its objectives could be realized.