U.S.GAAP has been criticized as being too "rules-based" thus allowing managers to invent "loopholes" that conform to the letter of a standard but simultaneously violate its spirit.

Question

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This is a common criticism of U.S.GAAP, which has been described as relying too heavily on specific rules and lacking the flexibility to address complex transactions. This can lead to managers finding ways to comply with the rules without accurately reflecting the economic substance of the transaction.

USGAAP Has Been Criticized as Being Too "Rules-Based" Thus Allowing