Influences on accounting regulation

2 Why jurisdictions have different rules

2.5 ‘Events, dear boy, events’

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 ‘Events, dear boy, events’.)Countries' systems are overtaken by events of one kind or another that bring accounting consequences. Not least of these is war. Napoleon's desire to conquer Europe had the side effect of exporting his Roman law paradigm and the commercial code within it, to half of Europe. A cornerstone of European accounting was, in effect, a military decision. It can be demonstrated that the First World War provided the motivation for the development of cost accounting. The 1870 Franco-Prussian war and, later, restitution, brought the GmbH into French law. The empire-building enthusiasms of the nineteenth-century Europeans also led to the spread of different European accounting models all over the world.

We do not need to go too far along this track, other than to note that such events can have far-reaching (and wholly unintended) accounting consequences, as also can political decisions to do things like becoming a member of the European Union.