Walton, Peter James
(1989)
Accounting harmonisation and the case of French use of the true and fair view.
PhD thesis, London School of Economics and Political Science.
Abstract
The literature which identifies national differences in accounting and addresses the problems of harmonisation is reviewed and consideration given to how this interacts with theories of accounting change. It is suggested that harmonisation attempts will be modified by the interplay of competing interests in each jurisdiction. The nature of the true and fair view in its British context is also reviewed and found to be a flexible notion whose use may serve a number of interests. Its adoption process of the European Community Fourth Company Law Directive is considered. French accounting since 1945 is analysed and consideration given to the influences which were active in accounting during the period of adaptation of French accounting in compliance with the Fourth Directive. The changes brought about in French accounting are considered as well as the French understanding of the true and fair view. Two empirical studies address the evidence of change after adoption. A study of recognition of excess tax depreciation in a sample of 50 published annual reports shows that a majority of companies changed their measurement approach. A second study sets out to observe whether the true and fair view as operationalised in the preparation of accounting statements from artificial data would be similar as between France and Britain. The study suggests that there are differences but these are as great between accountants within each national group as between the groups. It is concluded that the revision to French accounting provided an opportunity for the accounting profession and large enterprises to move towards an approach which served their interests. This involved freeing accounting from the domination of tax-driven measurement, and was only partly successful. The outcome is a compromise which provides accounts superficially similar to British ones but with substantial measurement issues still to be addressed. The French experience suggests that the process of harmonisation is a political one where external intervention simply provides an occasion for established interests to assert themselves.
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