The SEC's 2003 report to the Congress on "principles-based" accounting observed that the first characteristic of objectives-based standards,as dictated by the Sarbanes-Oxley Act,is that any standard must be based on
A) the cost-benefit test.
B) an improved and consistently applied framework.
C) qualitative characteristics.
D) transparency.

Question

Quizplus · Accepted Answer

The SEC's 2003 report to the Congress on "principles-based" accounting states that the first characteristic of objectives-based standards, as mandated by the Sarbanes-Oxley Act, is that any standard must be based on an improved and consistently applied framework. This means that the focus is on establishing a clearly defined framework for accounting standards that can be consistently applied across different situations and contexts, rather than relying on specific rules or requirements. This framework should be based on sound principles and should take into account qualitative characteristics, transparency, and the cost-benefit test, but these are not the primary focus.

The SEC's 2003 Report to the Congress on "Principles-Based" Accounting