Rules based accounting sometimes contributes to the rationalization of financial reporting fraud.

Question

Quizplus · Accepted Answer

Rules-based accounting focuses more on strict adherence to rules and regulations, rather than on the underlying economics of a transaction. This can sometimes create loopholes that can be exploited by individuals seeking to commit financial reporting fraud. As a result, rules-based accounting can sometimes contribute to the rationalization of such fraud.

Rules Based Accounting Sometimes Contributes to the Rationalization of Financial