BS3503 DEVELOPMENT OF ACCOUNTING 2020/21

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2020/21

BS3503

DEVELOPMENT OF ACCOUNTING

1.

(i)

Distinguish between (a) “the concept of minimum disclosure” and (b) “standardisation” as frameworks for determining the appropriate form and content of published accounts.

(12 Marks)

(ii)

Examine the relative roles of these two frameworks in determining the form and content of the published accounts of British companies between 1877 and 1981.

(13 Marks)

Total 25 Marks



2.

(i)

Define distributable profits in accordance with the Companies Act 1980.

(6 marks)

(ii)

In what way did the Companies Act 1981 increase the ability of a company to reorganise its share capital and what rules were laid down to ensure capital was maintained intact for the protection of creditors.

(10 Marks)

(iii)

Explain how the rules contained in the Companies Acts 1981 and 1982 compared with the decisions reached in (a) Lee v. Neuchatel Lake Asphalte Company (1879), (b) Lubbock v. British Bank of South America (1882), and (c) Trevor v. Whitworth (1887).

(9 marks)

Total 25 Marks

3.

Identify the different organisations given responsibility for regulating the corporate financial reporting practices of British companies since 1970 and explain why changes to institutional arrangements were made.

(25 marks)

4.

You are required to 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.

According to one writer, 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.

(i)

Examine the role of the Royal Mail Case (Rex v. Kylsant and another, 1931) in bringing about the ‘revolution in accounting thought and practice’.

(12 Marks)

(ii)

Outline (a) the recommended responses of the leaders of the professional accounting bodies to the weaknesses in corporate financial reporting practices which that episode revealed and (b) steps taken to improve financial reporting practices during the 1930s and 1940s.

(13 Marks)

Total 25 Marks

6.

Since the early years of the twentieth century, most large companies have conducted some of their business operations through subsidiary companies.

(i)

Identify the two ways in which subsidiaries could be used to conceal, from its shareholders, the true financial performance and position of a holding company.

(8 marks)

(ii)

Outline and assess the effectiveness of the financial reporting procedures devised to deal with these issues from 1948 onwards.

(17 marks)

Total 25 Marks













2022-01-08