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2018/2019

BS3503

DEVELOPMENT OF ACCOUNTING

1

According to Brian Magee of Bristol University, between 1926 and 1951 there occurred a ‘revolution in accounting thought and practice’ concerning the acceptability of secret reserves when companies prepared their annual accounts for publication.

Consider and evaluate

i. The relevance of the Royal Mail Case (Rex vs. Kylsant and another, 1931) for the ‘revolution’ referred to by Magee.

(12 Marks)

ii. The response of the professional accounting bodies to the weaknesses in corporate financial reporting practices which that the episode revealed.

(13 Marks)

(Total: 25 Marks)

2

Examine the respective roles of

(a) accounting standards and

(b) a conceptual framework

in the endeavour to improve the usefulness of published accounts in Great Britain since 1970. In so doing, provide explanations for the innovations which have occurred.

(25 marks)

3

Drawing on historical evidence, explain why:

i. Britain has comparatively more professionally-qualified accountants than most other countries.

(10 marks)

ii. There are so many accountants employed in British businesses, often in top management positions.

(15 marks)

(Total: 25 marks)

4

Conduct a critical examination of the idea that the adoption of double entry bookkeeping by businesses was a driving force in the emergence of a capitalist society in Britain.

(25 marks)



5

The Fourth European Council Directive, entitled ‘Annual accounts of companies with limited liability’, was issued in 1978 and implemented in Britain as part of the Companies Act 1981. The new act resulted in the introduction of standardised formats for the published accounts of limited liability companies.

The ‘standardisation’ issue had been the subject of debate in Britain, however, for well over a century prior to the passage of the Companies Act 1981.

Identify and critically assess the respective merits of the arguments put forward, in the period up to 1970, both for and against requiring company accounts to conform to a prescribed format.

(25 marks)

6

Critically evaluate the following idea:

A knowledge of the historical development of corporate financial reporting practices is useful for the purposes of understanding the present state of corporate financial practices, resolving its current problems and predicting future developments.

(25 marks)