Define principle based approach and rule based approach?

Question

Shahbaz Alam · Answer

In the principles system, companies follow the spirit of the “rule” or explain why it has not. This does not mean the company has a choice not to adhere to. It just means it can TEMPORARILY explain why it has not. The punishment for this non-adherence will be judged by investors
Rules-based control is when behavior is underpinned and prescribed by the statute of the country’s legislature. Compliance is therefore enforceable in law such that companies can face legal action if they fail to comply.

Ex. (US-listed companies are required to comply in detail with Sarbox provisions).

Sarbox compliance can also prove very expensive.

The same detailed provisions are required of SME's as of large companies, and these provisions apply to each company listed in New York.

haris sheraz · Answer

Principal and rule work on the base of one another .
Rules make for work rules can be changed but principals can't changes
 That basic difference