1

(i)

Explain the nature, purpose and limitations of the ‘capital maintenance rules’.

(9 Marks)

(ii)

Identify and evaluate the significance of statutory amendments made to the capital maintenance rules between 1867 and 1981.

(16 Marks)

Total 25 Marks

2

The publication of group accounts, by holding (parent) companies was a well-established practice in the United States by 1920 but not so in Great Britain.

(i)

Outline the main stages in the adoption of group accounting procedures by British holding companies up to 1948.

(15 marks)

(ii)

Identify and evaluate possible explanations for the relatively slow rate of change in group accounting practices in Great Britain compared with the United States up to 1948.

(10 Marks)

Total 25 Marks

3

Attempts made by the British Accounting Standards Committee to introduce current purchasing power accounting (CPP) and current cost accounting (CCA) in Great Britain in the 1970s and 1980s were based on the belief that historical cost was an unsatisfactory measurement basis for financial reporting purposes.

(i)

Explain why attempts to introduce CPP and CCA in Great Britain in the 1970s and 1980s were unsuccessful.

(12 Marks)

(ii)

Give examples of how the International Accounting Standards Board has, in recent decades, introduced the concept of fair value into accounting standards and explain why they may have achieved a greater measure of acceptance than did the initiatives of the British Accounting Standards Committee in the 1970s and 1980s.

(13 Marks)

Total 25 Marks

4

The history of accounting has been portrayed by Littleton and Zimmerman as evolutionary but by Anthony Hopwood as consisting of historical discontinuities.

Explain what is meant by the terms evolutionary and historical discontinuity in the context of accounting’s history, and critically evaluate their relevance for the purpose of explaining attempts to standardise published financial reports in Britain in the period up to 1981.

(25 marks)

5

Identify the main institutions responsible for the regulation of corporate financial reporting practices in Britain since 1970 and explain why changes to institutional arrangements have taken place.

(25 marks)

6

Charge and discharge accounting and double entry bookkeeping are methods of record keeping employed at various times in Britain over the last 800 years.

Distinguish between the nature and purpose of charge and discharge accounting and double entry bookkeeping and explain why the former system was replaced by the latter.

(25 marks)