New York (July 30, 2003) -- The Securities and Exchange Commission’s endorsement of a principles-based approach to accounting standards setting has rekindled discussion in the profession about “principles-based” versus “rules-based” standards.

In its study on the adoption of a principles-based accounting system by the U. S. financial reporting system, which was required under last year’s Sarbanes-Oxley Act, the SEC staff recommended developing accounting standards under a principles-based approach, which it labeled "objectives-oriented."

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