Abstract:
The financial crises in the past periods reflect the need for major changes of the financial reports and accounting information. A number of criticisms are directed at the accounting standards because they reflect the rules that govern the quality of accounting information. Therefore, there is a crucial need to switch and change a number of these standards . The current study aims to determine whether the accounting standards on the basis of the principles will have the ability to avoid all of these criticisms and improve the quality of accounting information. Otherwise, accounting standards are to prepared be based on rules. The study presents the selection basis of accounting standards (rules versus principles). A survey is the research method adopted to achieve the aims of the study. It gathers data on the rules / principles standards characteristics; the advantages and disadvantages of each; the ruling factors to achieve the effectiveness of accounting standards on the rules or principles and their impact on the quality of accounting information. The results of the study show that the classification of accounting standards to standards based on the principles and rules on the other list is relative and not absolute rating; the lack of assurances that the criteria on the basis of principles will be able to avoid all the shortcomings of the accounting standards on the basis of principles.
