Day, R. G
(1998)
The impact on the independence of accounting regulators of structure, process and inputs.
MPhil thesis, London School of Economics and Political Science.
Abstract
The thesis describes a model of regulatory independence based on the maximisation of certain characteristics and minimisation of others. The detailed regulation of accounting in the UK has, since 1970 been carried out in the private sector. The fact that this has been allowed to continue would imply that the government is prepared to accept this as the status quo, despite the constitutional anomaly of non-governmental rule-making. The regulation of accounting is not merely technical, but has economic consequences which stretch beyond the capital market. One of the main justifications for regulatory activity being performed outside of government is that of bringing about independent action. From a review of the theory and practice of regulatory agencies, several key characteristics emerge which it is argued, impact upon the independence of agencies. These characteristics may be grouped under the following headings: motives for agency creation, agency tasks, structure and method of operating. In order to examine the impact of these characteristics on agencies two main approaches are used, both based upon the regulators and their regulatory environment. Firstly general characteristics of accounting regulatory bodies are examined. Secondly, where specific processes are being studied, the development of two accounting standards. Statements of Standard Accounting Practice (SSAP's) 20 and 22 are used. From these particular cases it emerges that the regulators appear to have been influenced in their actions by those companies who would be affected by their pronouncements. The role of the government in the process is also significant in that they appear to attempt to influence the outcome of accounting standards in the same way as other participants in the process. The model that is developed is then compared with general independence-influencing theories of regulatory agencies, such as agency capture, iron triangle and agency life-cycle. It is concluded that the maximisation of the 'independence model' is difficult to achieve, given the inherent pressures affecting the individual characteristics.
Actions (login required)
 |
Record administration - authorised staff only |
Download statistics
Download statistics