● Ladies and Gentlemen, welcome to this debate.
● Welcome from this side of the house to the opposition members
● the motion for debate today is principles based accounting provide/not provide greater opportunity for manager to manage earnings
defining the motion:
● Now we as today's proposition strongly believe that this is true that principle based accounting provide greater opportunity for manager to manage earnings, but before we come to our actual argumentation, let us first define some important terms in this debate.
● We believe that what is meant by principle based accouting is that
Almost all companies are required to prepare their financial statements as set out by the Financial Accounting Standards Board (FASB), whose standards are generally principles-based
that principle will tell you what is the right thing to do and then you must judge what to do in specific circumstances, principles just like compass which shows the direction. Furthermore, they also mentioned that rules are like maps which show you exactly how to get there, a rule will tell you what to do in specific circumstances.
(Roger Hussey & Audra Ong 2005)
The fundamental advantage of principles-based accounting is that its broad guidelines can be practical for a variety of circumstances. Precise requirements can sometimes compel managers to manipulate the statements to fit what is compulsory. The problem with principles-based guidelines is that lack of guidelines can produce unreliable and inconsistent information that makes it difficult to compare one organization to another
● When we say earning management in next arguments...we mean that earning management which are allowable and non-allowable.
summarizing & ending your speech:
● So Ladies and Gentlemen, what have we told you today? Firstly is the lack of precise guidelines, Secondly variation on single accounting transaction and Lastly management compensation scheme