Question

If a single set of worldwide accounting standards were to be developed, do you think they should be principles-bases or rules- based?

Answer 1

Principles based accounting broadly speaking are a set of systems where the local countries can create rules off of where as rules bsed accounting is a standardised law-adjacent mechanisms such as the US GAAP system where companies must adhere to the rules in order to compile the financials.

Priniciples based accounting sets broad guidelines which can be edited and made to fit to the local systems of the country at hand. So while both India and the UK follow IFRS, their local rules can be adjudicated by the local accounting bodies.

For a world wide system priniciples based accounting is a better fit as the local bodies can decide the "guidelines" within the principles based on local realities where as the same cannot be said for a worldwide rules based system.