Furthermore, “The characteristics of such standards are identified through a conceptual enquiry into how standard setters, regulators and academics explain their nature. Superficial agreement on these characteristics masks disagreement about the reasons why these characteristics are thought to be desirable. These depend upon underlying assumptions about the nature of prescriptions in standards and about the purpose of providing implementation guidance in an accounting standard. The apparent agreement that ‘principles-based’ standards are a good thing is facilitated by the fact that this concept refers to a ‘boundary object’. With such concepts common characteristics allow for communication between parties who have different underlying interests and start from different assumptions about how those interests can be achieved.”
Nonetheless, “The failure to agree on these assumptions manifests itself in disagreement in the application of the concept to particular standards. This means that the concept is vague. Boundary objects may be useful for certain purposes, including political ones, but are not helpful in achieving the objectives of the current project of converging accounting standards. The paper concludes that a debate about fundamental issues about standard setting and accounting standards would be facilitated if the concept of ‘principles-based’ standards was abandoned.”
