Principles-based Approach Research Articles

The World Heritage Centre’s approaches to the conservation of New Gourna Village, and the assessment of its authenticity and integrity

New Gourna Village, which is located inside one of the World Heritage Sites in Egypt, has never been recognized as an element contributing to the site’s Outstanding Universal Value. The recognition of the village as a contributing element is reliant on the successful assessment of its authenticity and integrity. Responding to the dramatically declining integrity of the village, the World Heritage Centre has carried out an architectural study to guide the potential conservation works in the property. The study has recommended that a group of objectives and two approaches to the conservation of the village should be adopted. One of these two approaches has been concerned with the conservation of the village according to the architect’s original intentions and principles. The previous approach can be called the principles-based approach. The main aim of this study was to examine the agreement of the World Heritage Centre’s objectives and their proposed principles-based approach to the conservation of the village with the aim to improve its chance in meeting the conditions of authenticity and integrity. The study approached the previous aim by assessing, by means of a proposed methodology; the level of significance, authenticity and integrity of the property. Based on the previous assessment, a list of conservation interventions was proposed to improve the property’s chance in meeting the conditions of authenticity and integrity. Finally, the World Heritage Centre’s recommended approaches and objectives were examined against the previous proposed conservation interventions. The findings indicated the possibility to adopt the principles-based approach to the conservation of New Gourna Village, as well as the other World Heritage Centre’s objectives, without limiting the property’s chance in meeting the conditions of authenticity and integrity. The study recommends to carry out further studies that are concerned with the identification of the architect’s philosophy and architectural principles that should be the key reference of all the potential conservation interventions in the village.

Evidences of Vagueness in the Accounting Standards and Their Consequences for the Principles- versus Rules-Based Debate

Since the outbreak of corporate accounting scandals such as Enron case, claims for standards based in principles instead of in rules became more frequent and enthusiastic. Then, standard setters introduced a transition to a more principles-based approach and the immediate consequence of such a transition is the increasing need of professional judgment in accounting. However, principles-based standards tend to be more intensively characterized by vagueness (Penno, 2008). The literature has addressed the rules- versus principal-based accounting standards debate, but questions about how accounting decisions are made under vague conditions were hardly explored in practical terms: this is our focus. To address such an issue, we formulated two propositions: (1) accountants’ decisions made under vague conditions are significantly different from those made under non-vague conditions; and as an alternative explanation, (2) accountants’ decisions can be influenced by their individual cognitive reflection ability. To test the hypotheses connected to those proposition, we collected data via a questionnaire containing accounting tasks related to the classification of assets and cash flows, and the three questions from the Cognitive Reflection Test developed by Frederick (2005). Based on a sample of 859 accountants, we developed univatiate analyses and found that the dispersion on classification is significantly higher under vague conditions, than under non-vague conditions. Moreover, the results suggest that the cognitive reflection ability does not help accountants to deal with vague circumstances. Thus, no matter how much they reflect about a transaction, such dispersion persists. It mitigates the consistent application of IFRSs and the quality of accounting information – indeed, its comparability.

Preparing disabled students for professional practice: managing risk through a principles‐based approach

A discussion exploring the ways disabled students are managed in practice settings. It proposes and argues for morally and legally viable principles to guide risk assessment and inclusive decision-making in practice. Equality law means that universities are bound not to discriminate against students on the basis, amongst other things, of disability. As a consequence in the UK, there is a perceived increase in numbers of disabled people applying for and succeeding as health professionals. Whilst placement providers are equally obliged by the law to have inclusive policies, competing needs including patient safety, public confidence and professional regulations mean that adjustments that can be made in an educational environment to appropriately support student learning may prove to be more difficult in placements that provide direct care to the public. This discussion is an outcome of recommendations from published research by the authors and their research partners. It is supported by related literature, critical debate amongst academics, disabled students and disabled and non-disabled practitioners. Ensuring a nursing workforce that mirrors the diversity of the population it serves is of universal importance. Effective management of disabled students can contribute to achieving this goal and to promoting a positive view of disabled practitioners. Legislation is necessary to protect disabled people from discrimination. To respect this legislation, when preparing nurses and other health professions, a clear understanding of the law and a principles-based approach to guiding risk is important.

Involving Disadvantaged People in Dialogue: Arguments and Examples from Mental Health Care

This paper examines the theoretical and practical basis for engaging in dialogue with very disadvantaged people. Using a selective literature review, conceptual analysis, and clinical examples, we explore the reasonable limits of dialogue with disadvantaged populations in order to better understand dialogue, as well as to explore ways to effectively involve disadvantaged people in dialogue. Although people with serious mental illness represent only one very disadvantaged population, we suggest that examining dialogue with this population can serve as a test case for dialogue with disadvantaged people more generally. A recovery-oriented approach can support dialogue processes with people who have mental illness, as their recovery may require, or at least benefit from, dialogue. The inclusion of two clinical scenarios serves to highlight differences in clinical and personal recovery outcomes when dialogue is and is not present in mental health care. Furthermore, although it is not required from a standard principles-based bioethical approach, involving people with mental health issues in dialogue can complement a standard bioethics approach, through dialogical bioethics. A dialogical approach goes beyond the standard principles of bioethics by means of a process that allows relevant bioethical principles to be prioritised, based in part on the person’s informed choice. Overall, our findings suggest that involving very disadvantaged people in dialogue – in this case, people with serious mental illness – is not only possible, it is plausible and can be constructive in relation to a variety of dialogical aims that range from informing to supporting to decision-making processes.

Protecting online information privacy in a converged digital environment – the merits of the new Australian privacy principles

Maintaining the privacy of information collected, exchanged and stored on the Internet is becoming increasingly difficult as technologies supporting intrusive practices such as data mining, data matching and spyware become progressively more sophisticated and subtle. The challenge for law makers is to formulate laws that both address presently identified threats and have the capacity to encompass future technological evolution. The new Australian Privacy Principles, due to take effect from March 2014, adopt a principles-based and technology-neutral approach that promises to support the longevity of the enacted laws. The Act introduces a variety of new provisions that have the effect of significantly strengthening online privacy protection by addressing the threats to privacy presented by data mining, data matching and direct marketing practices. It is submitted that the new, expanded and prescriptive Australian privacy laws evidence a shift towards the European governance philosophy that is premised on societal protection norms that conceive the State as having primary responsibility for ensuring information practices serve individual identity.

An examination of the perceptions of auditors and chief financial officers regarding principles versus rules based accounting standards

The debate over the adoption of International Financial Reporting Standards (IFRS) by United States issuers, or its convergence with U.S. Generally Accepted Accounting Principles (U.S. GAAP) has been going on for several years now. However, as of this writing, the Securities and Exchange Commission (SEC) has still not taken a definitive position on the issue. This is in part due to issues involving the cost of adoption, independence concerns relating to the IFRS promulgation body, the International Accounting Standards Board (IASB), and the debate over which type of accounting standards is superior for financial reporting: IFRS, which are said to be “principles-based,” or U.S. GAAP, which are said to be “rules-based.” In this paper we examined the views of two stakeholders in the U.S. financial reporting system, auditors in large public accounting firms and Chief Financial Officers in the Fortune 1000. We elicited their perceptions involving ten situations where specific rules are incorporated in U.S. GAAP. We asked if the elimination of the specific rule would be likely to better achieve the “qualitative characteristics of useful financial information” as defined by the Conceptual Framework for Financial Reporting adopted by the Financial Accounting Standards Board (FASB) in 2010 (FASB 2010) and the similar document adopted by the IASB at the same time (IASB 2010). We found that in eight of the ten situations both groups preferred the rules-based accounting regime (the current U.S. GAAP rules) over a principles-based approach.

Will Regulatory Enforcement and Principles Versus Rules-Based Accounting Influence Auditors' Judgments to Constrain Aggressive Reporting?

With the movement towards consideration of International Financial Reporting Standards (IFRS) in the U.S., a question arises as to whether the adoption of a principles-based approach such as the IFRS will ultimately result in higher quality financial reporting. This issue is particularly relevant as the SEC and the securities markets ponder the implications of a decision that may lead to the ultimate adoption of, or convergence with, IFRS in the U.S. To examine this issue, we employ an experimental approach with 97 experienced auditors as participants. Using a case setting involving the classification of a lease (operating vs. capital), we manipulate the accounting standard as rules-based or principles-based and the regulatory enforcement regime as strong or weak. The lease setting is one where there are indications of management aggressive reporting with the transaction structured to just comply with accounting rules and with incentives to leave the debt off of the Balance Sheet. We find that in a strong regulatory enforcement regime, auditors are more likely to constrain aggressive reporting under principles-based accounting standards than under rules-based accounting standards. We also provide exploratory findings indicating that auditors’ judgments under principles-based standards, regardless of the strength of regulatory enforcement, will lead to more conservative reporting when compared with a rules-based regime coupled with strong regulatory enforcement, indicative of the current reporting setting in the U.S. The implications of the findings for research and public policy are presented.

How Does the Strength of the Financial Regulatory Regime Influence Auditors' Judgments to Constrain Aggressive Reporting in a Principles-Based Versus Rules-Based Accounting Environment?

SYNOPSIS:With the movement toward adoption of International Financial Reporting Standards (IFRS) worldwide, a question arises as to whether the adoption of a principles-based approach, such as IFRS, will ultimately result in higher-quality financial reporting. This issue is particularly relevant because, even though for now the SEC is not adopting IFRS, the securities markets and the SEC still need to ponder the implications of a decision that may lead to the ultimate adoption of, or at least some degree of convergence with, IFRS in the U.S. To examine this issue, we employ an experiment with 97 experienced auditors as participants. Using a case setting involving the classification of a lease (operating versus capital), we manipulate the accounting standard type as rules-based or principles-based, and the regulatory regime as stronger or weaker. The lease setting is one where there are indications of management's incentives to leave the debt off of the balance sheet and, hence, engage in aggressive reporting. We find, as expected, that auditors are more likely to constrain aggressive reporting under principles-based accounting standards than under rules-based standards, under both stronger and weaker regulatory regimes. Importantly, from a public policy perspective, the results indicate that auditors' judgments under principles-based standards, regardless of the strength of the financial regulatory regime, lead to more conservative reporting when compared to rules-based standards coupled with a stronger financial regulatory regime, which is the way the U.S. environment is often characterized.

Developing integrative research for sustainability science through a complexity principles-based approach

The importance of taking an integrative approach to research has long been integral to sustainability science, and has recently been highlighted as fundamental to the co-design of research and co-production of knowledge. Just what this means, however, and how to implement such a broad notion has escaped effective methodological development. In order to become more than a generic descriptor, integrative research needs to be conceptualized and presented in ways that offer guidance to researchers designing and conducting integrative research projects, whilst remaining broad enough to be relevant to the breadth and depth of sustainability-related problems. Drawing on complexity theory and fundamental aspects of integrative research, I present a methodological framing that seeks to achieve this balance. Using a definition of integrative research as “research in the context of complexity, with an action imperative”, I draw from complexity theory that proposes minimal specifications, generative relationships, focusing on enablers and seeking diversity as core features of a complexity-based approach. On that basis I propose four principles that can be used by researchers to guide the design and implementation of their projects: embrace uncertainty; engage stakeholders; be transdisciplinary; and have a learning orientation. Each of these principles is explained, and their relationships to research design, methodological framing, choice of methods and project development are presented. Two integrative research project frameworks are presented as examples of how this principles-based approach can be implemented in research design. Using this approach offers a simple but powerful structure to guide integrative research for sustainability science at the project scale.

International access to restricted data: A principles-based standards approach

Cross-border access to restricted government microdata for research has made relatively little progress. Recent developments are notable as exceptions. This paper argues that the situation is made more complex by the lack of a common general frame of reference for comparing objectives and concerns; this reinforces the risk-aversion in government organisations. Attempts to develop general international data access strategies therefore collapse to sui generis bilateral agreements of limited strategic value. One way forward is to decouple implementation from strategic principles. A principles-based risk-assessment framework, using popular multiple-component data security models, allows decisions about access to focus on objectives; similarly, secure facilities could be developed to standards independent of dataset-specific negotiations. In an international context, proposals for classification systems are easier to agree than specific multilateral implementations. Moreover, a principles-based approach can be aligned with organisational goals, allowing countries to signal strategic intentions to others without the need for explicit commitment. The paper uses examples from the UK, US and cross-European projects to show how such principles-based standards have worked on a within-country basis and may help to resolve immediate practical issues. © 2013 - IOS Press and the authors. All rights reserved.

Some Implications of IFRS Adoption for Accounting Education

This paper addresses challenges accounting educators face in their teaching following the adoption of International Financial Reporting Standards (IFRS). We use Australia as an example of a developed nation and 2005 adopter of IFRS, the United States as a potential adopter, and Romania as an emerging economy with a history of harmonisation and adoption initiatives. Accounting educators globally need to strengthen their engagement with the principles‐based approach to teaching IFRS. Teaching resources, educational research and Continuing Professional Development activities related to a principles‐based approach to teaching IFRS are necessary for educators to enrich the learning experience of students given the move from a rules‐based to a principles‐based set of accounting standards.

What Makes Better Boards?: A Closer Look at Diversity and Ownership

This study investigates the joint effect of corporate ownership and board of directors’ diversity configurations on the success of strategic mergers and acquisitions (M&A) decisions. Board diversity is defined as the extent to which its demographic diversity as measured by the culture, nationality, gender and experience of its directors complements its statutory diversity. A theoretical framework linking ownership, board diversity and M&A strategic decision making is proposed and tested. Based on a sample of 289 M&A decisions undertaken by Canadian firms over the period 2000-2007, demographic diversity is found to have a clear and non linear effect on M&A performance while statutory diversity is of limited influence. Ownership is found to influence the effect of diversity, making the relation finer and more precise. This has practical implications. First, statutory diversity is not sufficient for well-performing boards. Also, ownership is an important factor. The mostly advocated board diversity aimed at insuring the board’s independence is not valid across all ownership configurations. From a public policy perspective, results provide support for the principles-based approach in governance. Governance regimes should encourage the search for a balance between board diversity and the need for cohesion that best serves the firm’s purpose and obligations.

Will Regulatory Enforcement and Principles versus Rules-Based Accounting Influence Auditors’ Judgments to Constrain Aggressive Reporting?

With the movement towards adoption of International Financial Reporting Standards (IFRS) worldwide, a question arises as to whether the adoption of a principles-based approach such as IFRS will ultimately result in higher quality financial reporting. This issue is particularly relevant because, even though for now the SEC is not adopting IFRS, the securities markets and the SEC still need to ponder the implications of a decision that may lead to the ultimate adoption of, or at least some degree of convergence with, IFRS in the U.S. To examine this issue, we employ an experiment with 97 experienced auditors as participants. Using a case setting involving the classification of a lease (operating versus capital), we manipulate the accounting standard type as rules-based or principles-based, and the regulatory regime as stronger or weaker. The lease setting is one where there are indications of management’s incentives to leave the debt off of the balance sheet and hence engage in aggressive reporting. We find, as expected, that auditors are more likely to constrain aggressive reporting under principles-based accounting standards than under rules-based standards, under both stronger and weaker regulatory regimes. Importantly, from a public policy perspective, the results indicate that auditors’ judgments under principles-based standards, regardless of the strength of the financial regulatory regime, lead to more conservative reporting when compared to rules-based standards coupled with a stronger financial regulatory regime, which is the way the U.S. environment is often characterized.

The content of accounting standards: Principles versus rules

The Global Accounting Alliance has raised a call for different perspectives on principles-based accounting standards. Based on prior studies this paper identifies a number of characteristics of principles-based accounting standards. It uses content analysis to empirically test whether the asserted characteristics are consistent with the IASB and FASB standards on interest costs. We find that rules-based standards, relative to principles-based standards, have more rules, more justification, acknowledge less judgement is required, have more bright-line thresholds, have more scope exceptions, and are more verbose and complex. The main drafting difference between a rules-based or principles-based approach is whether extensional definitions or intensional definitions are used. Several policy implications are noted.

Demonstrating Reasonable Certainty Under Principles-Based Oil and Gas Reserves Regulations

Summary Historically, oil and gas reserves definitions have included the term "reasonable certainty" when describing the standard of high confidence/low uncertainty for a conservative estimate of future recovery from an accumulation. In 2008, the US Securities and Exchange Commission (SEC), one source for such definitions and regulations, changed its rules on oil and gas reserves and moved from a more rules-based approach to a more principles-based approach. While the SEC regulations both before and after this change incorporated the term "reasonable certainty," the philosophical change from rules-based to principles-based regulation puts more responsibility on the reserves evaluator to understand the uncertainties in the reserves estimation and to "get it right." This paper examines the stated definition of reasonable certainty as well as the effective definition based on how the regulations were interpreted under the prior rules-based system. Examples of prior methods of regulatory controls, under a rules-based system, that no longer fit under a principles-based system are noted. The paper then examines the current definition. The overprint of a principles-based regulatory system must be considered to understand how such an approach will impact the effective definition under the current rules. The insights from the financial and legal communities are examined for their learnings in which other forms of regulations underwent this same philosophical change. This examination describes how rules-based systems are more "input control" focused, while principles-based systems focus more on "outcomes." Next, the paper suggests how the reserves evaluator should apply this understanding of the new principles-based rules. The evaluator is now more responsible to understand the range of uncertainty in reserves estimates and to ensure that the outcome (the proved reserves estimate) satisfies the regulations. Also, the paper discusses key tests to demonstrate that the correct outcome— a reasonably certain volume—has been achieved. After 30 years of well-established practices, the responsible reserves evaluator has examined changes as they evolved in then-current regulation text. Now, the evaluator needs to additionally consider changes based on the implications of principles-based regulations.

Emergency department triage: an ethical analysis

BackgroundEmergency departments across the globe follow a triage system in order to cope with overcrowding. The intention behind triage is to improve the emergency care and to prioritize cases in terms of clinical urgency.DiscussionIn emergency department triage, medical care might lead to adverse consequences like delay in providing care, compromise in privacy and confidentiality, poor physician-patient communication, failing to provide the necessary care altogether, or even having to decide whose life to save when not everyone can be saved. These consequences challenge the ethical quality of emergency care. This article provides an ethical analysis of "routine" emergency department triage. The four principles of biomedical ethics - viz. respect for autonomy, beneficence, nonmaleficence and justice provide the starting point and help us to identify the ethical challenges of emergency department triage. However, they do not offer a comprehensive ethical view. To address the ethical issues of emergency department triage from a more comprehensive ethical view, the care ethics perspective offers additional insights.SummaryWe integrate the results from the analysis using four principles of biomedical ethics into care ethics perspective on triage and propose an integrated clinically and ethically based framework of emergency department triage planning, as seen from a comprehensive ethics perspective that incorporates both the principles-based and care-oriented approach.

Does Adopting High-Standard Corporate Governance Increase Firm Value? An Empirical Analysis Of Canadian Companies

Research on the impact of corporate governance on firm value has provided inconclusive results. The findings vary depending on the sample, country of study (regulation, law, shareholder protection, market development, etc.) and methodology employed. Many studies are unable to detect significant connection between corporate governance and firm value. Unlike the United States, Canada adopts a principles-based approach in corporate governance regulation. Canadian companies are required to disclose whether they comply with the corporate governance guidelines set up by authorities (such as the Toronto Stock Exchange) or explain deviations from the guidelines. Using panel data from 2004 to 2008 in Canada the empirical analyses in this paper show that the finding on the connection between corporate governance and firm value is sensitive to the methodology employed. Controlling relevant information is crucial to the results. When the data is analyzed in a self-selection framework, it is found that some time-varying unobservable firm characteristics that make firms adopt high-standard corporate governance also increase firm value, and somewhat surprisingly, adopting better corporate governance practices per se seems to decrease firm value. The results support the view that firms use sound corporate governance to signal their favorable private information.

Developing Games Using a Principles-Based Approach

The Teaching Games for Understanding (TGfU) model was first developed by Bunker and Thorpe in 1982 as a model for coaches to help players become more skillful players. Since then other versions of the model have been developed such as the tactical decision-learning model (Grehaigne, Godbout, & Bouthier, 2001) in France and the game–sense approach (Australian Sports Commission, 1991) in Australia and New Zealand. The key aspect of all the models is the design of well-structured conditioned and modified games that require players to make decisions to develop their game understanding and tactical awareness. However, both novice and experienced coaches often struggle with connecting theory to practice especially in the area of creating and developing contextualized games that actually transfer learning from training to performance in games. In order to effectively create and use games that transfer learning, coaches can use a Principles-Based approach to develop games. The Principles-Based approach removes the dichotomy of traditional drills versus games and instead combines the drills approach with a games-context approach that links principles to skills that allow for increased individual and team expertise development. This presentation will first describe a model for developing and connecting principles, policies, tactics and skills for team play. Following this the presentation will then describe how to use the principles to create contextualized games that connect practices with performance and progresses novice players toward becoming more competent performers.

A principles-based approach to cadastral reinstatement for Australian jurisdictions

Cadastral reinstatement is the process whereby a cadastral surveyor re-establishes and describes the position of boundaries created by earlier actions. Previous boundary reinstatement cases are examined and the principles on which the courts made their decisions are identified. These principles are synthesised into a simple set of guidelines that may be applied by cadastral surveyors to practical cadastral reinstatement problems. A number of common circumstances that confront practising cadastral surveyors are used to show how these principles may be used to supplement the hierarchy approach to reinstatement.

ASTRO‐FOLD 2.0: An enhanced framework for protein structure prediction

The three-dimensional (3-D) structure prediction of proteins, given their amino acid sequence, is addressed using the first principles-based approach ASTRO-FOLD 2.0. The key features presented are: (1) Secondary structure prediction using a novel optimization-based consensus approach, (2) β-sheet topology prediction using mixed-integer linear optimization (MILP), (3) Residue-to-residue contact prediction using a high-resolution distance-dependent force field and MILP formulation, (4) Tight dihedral angle and distance bound generation for loop residues using dihedral angle clustering and non-linear optimization (NLP), (5) 3-D structure prediction using deterministic global optimization, stochastic conformational space annealing, and the full-atomistic ECEPP/3 potential, (6) Near-native structure selection using a traveling salesman problem-based clustering approach, ICON, and (7) Improved bound generation using chemical shifts of subsets of heavy atoms, generated by SPARTA and CS23D. Computational results of ASTRO-FOLD 2.0 on 47 blind targets of the recently concluded CASP9 experiment are presented.