The Institute of Chartered Accountants of Scotland (ICAS)
has long advocated the benefits of principles-based accounting standards. The
success of such standards relies on the ability of accountants to make "good
quality" judgments, but to those new to the profession or new to
principles-based standards, making judgments can be difficult.
The need for appropriate guidance to help those making
judgments and the need to develop a professional judgment framework became evident from earlier ICAS projects on principles-based accounting standards,
particularly while undertaking interviews for the report Chineseaccounting reform: Towards a principles-based global regime (also available in Chinese). The report
provides insight into China’s adoption of IFRS-based standards and broadens the
principles versus rules debate beyond Canada, Europe and the United States.
The main objectives of the research project were: (1) to
identify and highlight the achievements in the implementation of IFRS
principles-based standards in China; (2) to identify and consider the issues to
be addressed in the implementation of principles-based standards, with a focus on the
experience in China; and (3) to assess the degree of support for principles-based
standards in China, in order to influence the future development of IFRS. This
32-page report, published in June 2010, is available on the ICAS website, along with
other pertinent financial reporting guidance publications.