Financial Reporting in the UK: A History of the Accounting Standards Committee, 1969-1990 (Routledge Historical Perspectives in Accounting)

457 Pages·2007·2.55 MB·English

by  B Rutherford

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Financial Reporting in the UK
The UK accountancy profession’s attempts to regulate financial reporting came
under heavy attack in the late 1960s. Deficiencies in accounting methods were
perceived as an important factor in causing several major financial scandals.
In this comprehensive volume, Brian Rutherford examines the history of the
Accounting Standards Committee, the body responsible for developing financial
accountingstandardsintheUKfrom1969to1990,providinganaccountofthe
regulation of financial reporting during that period. Financial Reporting in the UK
covers the formulation of standards on specific topics, the evolution of the
institutional machinery of standard-setting, and a number of general themes
includingthepoliticsofstandard-setting,thetheoryofaccountingstandardisation
and the emergence of a conceptual framework for financial reporting.
Thisbookanalysesthebig‘setbattles’betweenstandard-settersandpreparers
of financial statements, over topics such as price change accounting, goodwill,
leasing and foreign currency translation. It also gives attention to the stand-offs
which delayed development in specific areas, as well as the smaller skirmishes
whichimpededtheday-to-dayworkofimprovingfinancialreporting.Rutherford
looks at theroutinechallenges facingthose whoattempt to prescribeaccounting
practice and examines the ‘tradecraft’ of standard construction.
Financial Reporting in the UK argues that the relationship between accounting
standardsandthe‘scandals’theyareoftenseenasrespondingtoismorecomplex
than is generally understood: in particular, although the committee was estab-
lishedtoeliminatevarietyinaccountingmethods,suchvarietywasimplicatedto
only a limited degree in the scandals generally associated with its establishment.
Another important theme running through the book is the difficulty the British
accountancy profession – then, as now, divided between six different institutes –
has in co-ordinating its activities in pursuit of the public good.
The concluding chapter of this volume examines the implications of the
findings for accounting regulators.
BrianA.RutherfordisProfessorofAccountingattheUniversityofKent,UK.
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Routledge Historical Perspectives in Accounting
Edited by Stephen A. Zeff, Rice University, USA
1 Profitability, Accounting Theory and Methodology
The Selected Essays of Geoffrey Whittington
Geoffrey Whittington
2 Financial Reporting in the UK
A History of the Accounting Standards Committee, 1969–1990
Brian A. Rutherford
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Financial Reporting in
the UK
A history of the accounting standards committee,
1969–1990
Brian A. Rutherford
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Firstpublished2007byRoutledge
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SimultaneouslypublishedintheUSAandCanada
byRoutledge
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#2007BrianA.Rutherford
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ISBN 0-203-93413-X Master e-book ISBN
ISBN978-0-415-39421-5 (Print Edition)
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For Lynne, as always, and for Jo and Steph
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Contents
List of Tables ix
Preface x
Series Editor’s Foreword xiii
Acknowledgements xv
List of Abbreviations xvi
1 ‘Present Troubles, and More to Come’ 1
2 The Invention of the Accounting Standard 22
3 Honeymoon Period: 1970–1974 48
4 Accounting for Changing Prices: The Struggle Begins 91
5 The Holy Grail 106
6 The Going Gets Tougher: 1975–1979 120
7 Reforming the System 154
8 The Art of the Possible: 1980–1984 177
9 Accounting for Changing Prices: The Struggle Continues –
and Ends Badly 224
10 Losing Steam? 1985–1990 248
11 Setting Accounting Standards 1969–1990: Technical and
Political Realms 293
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viii Contents
Notes 315
Appendices
1 Sources 392
2 Statement of Intent on Accounting Standards in the 1970s 393
3 Extracts from the Watts Report 395
4 Chairmen of the Accounting Standards Committee 401
5 Secretaries to the Accounting Standards Committee 402
6 Members of the Accounting Standards Committee 403
7 Statements of Standard Accounting Practice Issued 411
8 Exposure Drafts Issued 413
9 Submissions on Exposure Drafts 415
Bibliography 418
Index 428
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List of Tables
3.1 The ASSC’s initial five-year work programme 49
3.2 Initial five-year work programme and output 85
6.1 Qualifications and special comments on non-compliance
with SSAPs and GAAP 127
6.2 Reasons given for not depreciating freehold buildings
or long leasehold property 1979–80 147