Uk accounting regulation: an historical perspective

The Profession Moves (slowly)

Apart from reaction to the Royal Mail Case and the Society’s view on consolidated

accounts, the professional institutes did little during the 1930’s to improve accounting. The

Society had formed an unofficial committee to promote the idea of research and the

increasing importance of spreading new thought and the evolution of practice, but these

were ideas only which did not come to fruition until 1948, when a regular journal

“Accounting Research” was published. Surprisingly it was the English Institute of

Chartered Accountants, which until then had been the least progressive of the professional

bodies, who became involved in the authoritative establishment of accounting principles,

although as Zeff observes, more by evolution than by deliberate policy. Increasingly during

the 1930’s, newly qualified Institute members were taking employment in industrial and

commercial concerns. The attitude of the Institute was that such accountants had ‘left the

profession’. No booklets on guidance statements and technical matters were published and

these members in industry were becoming increasingly critical of an Institute which did

nothing to serve them.

This led the Institute, in 1942, to attempt to broaden its membership base by the creation

of a Taxation and Financial Relations Committee to be composed of both practicing and

non-practicing members to consider matters of ‘taxation and the financial relationship of

the business community with the Inland Revenue and other Government Departments’.

The Committee extended its’ mandate in a way not foreseen, and applied to (and received

from) the General Council of the Institute, permission to prepare drafts of pronouncements

on accounting principles. These were non-mandatory but they did express an authoritative

statement on accounting, which upgraded existing practice. In all 29 Recommendations on

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Accounting Principles were issued between 1942 and 1969.