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)qualitative characteristics.
B)transparency.
C)an improved and consistently applied framework.
D)the cost-benefit test.

Question

Quizplus · Accepted Answer

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 an improved and consistently applied framework. Therefore, choice C is the correct answer. Option A is incorrect, as qualitative characteristics are typically associated with principles-based accounting. Option B is also incorrect, as transparency is a desired outcome but not a characteristic. Finally, option D, although important, is not a characteristic of objectives-based standards, as it is more relevant to cost-benefit analysis.

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