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Time: 6 hours
Level: Masters
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 Introduction Resource- This unit examines how national practices for financial reporting have evolved and why different rules are in place within different jurisdications. In times past, imperialism and war have both been responsible...
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- 1.1 Reporting international financial information Resource
- This unit is not concerned with how accounting information is captured or stored, nor how it is used internally within an international group, although those are certainly significant issues, but rather...
- 1.2 Stewardship Resource
- The simplest form of financial reporting has been around, originally unregulated, for thousands of years. Ever since possessors of wealth appointed other people to manage their money, the agents have been...
- 1.3 Managing the national economy Resource
- The earliest regulation in Europe was not motivated by stewardship concerns, but was aimed at small businesses whose owners did not take the trouble to measure the success of their business. Consequently...
- 1.4 Information for investors Resource
- The next major evolution in accounting was the impact of the Industrial Revolution, when, in the nineteenth century, much of the infrastructure of financial reporting as we now know it was laid down. The...
- 1.5 Borrowed finery Resource
- These examples show how financial reporting has evolved in response to economic evolution, but other influences have occurred also. One of these is ‘borrowing’ legislation from other countries. There is...
- 1.6 Imperialism Resource
- Related to the idea of transferring regulation across borders, is the influence of colonial tradition and of trade relations. The European colonisers, notably the UK and France, transferred their accounting...
- 1.7 Taxation Resource
- Another function of accounting is to provide the basis on which tax is measured. The link between taxation and financial reporting is stronger in some countries than others, and is typically much more...
- 1.8 Conclusion Resource
- This section has demonstrated that regulation evolves in response to a number of factors. Some of the more significant ones, such as economic development, ‘borrowed’ legislation, colonisation and imperialism...
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| | 2 Why jurisdictions have different rules
- 2.1 Accounting rules and reality Resource
- In a seminal article, Hines (1988) demonstrates that when we draw up accounting rules, we determine what view of reality we present. At its simplest, if we decide that internally-generated intangibles...
- 2.2 Objectives of financial reporting Resource
- The International Accounting Standards Board (IASB) has a conceptual framework that aims to set out publicly which qualities should be in the forefront of the standard-setters' minds when making accounting...
- 2.3 Contingent model of accounting change Resource
- The totality of the accounting rules in any one country at any one time represents an accumulation of rules that have been brought in over many years (even centuries, in the French case). In remembering...
- 2.4 Means of regulation Resource
- We have started to draw attention to cultural variables already when talking about the perceived objectives of financial reporting. In this next section, cultural issues can be seen to have a considerable...
- 2.5 ‘Events, dear boy, events’ Resource
- A further influence on accounting is, to borrow Macmillan, events. (Macmillan was the Prime Minister of the UK (1957–1963) who famously observed that the greatest obstacle to political achievement was...
- 2.6 Conclusion Resource
- This section has considered the reasons for different systems of accounting regulation in more detail. A number of factors external to accounting (e.g. the legal system and so-called ‘accidents of history’)...
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| | References and Acknowledgements | |
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