FORGOTTEN FLAMES: THE UNTOLD STORIES OF WOMEN IN INDIA'S FREEDOM STRUGGLE

Abstract

The debate over which is the better accounting standards philosophy – ‘principles’ or ‘rules’ has persisted since the fall of Enron at the dawn of the 21st Century to the most recent allegation of stock manipulation and accounting fraud in Adani Group. This exploratory study is required to generate the knowledge essential to prevent accounting frauds and corporate failures. The purpose of this research is to investigate the correlation between the philosophy of accounting standards and the prevalence of accounting scandals. In order to achieve the objective, we contrast principles-based versus rules-based accounting standards across 19 countries that reported accounting scandals from 2001 to 2023. Simple percentages and charts were used in analyzing the data. According to the analysis, 46 publicly traded U.S companies reported 77 percent of the accounting scandals, while 14 companies in eight various nations that have adopted IFRS reported 23 percent of the scandals. This indicates that the United States experienced approximately 3 times as many accounting scandals as countries with stronger accounting standards. The fact that IFRS-compliant nations also reported accounting frauds raises concern of a potential abuse of professional judgment and discretion allowed in the standards. This study supports the adoption of the principles-based IFRS globally because it encourages increased use of professional judgment. However, to prevent possible abuse, it is advised that standard-setters, governance regulators, and statutory auditors maintain a stringent compliance and enforcement regime.