Accounting Principles, Internal Conflict and the State: The Case of the ICAEW, 1948–1966

Masayoshi Noguchi and John Richard Edwards

Abacus, 2004, vol. 40, issue 3, 280-320

Abstract: The series of Recommendations on Accounting Principles (RoAPs) issued by the Institute of Chartered Accountants in England and Wales (ICAEW) between 1942 and 1969 demonstrated the willingness of a professional accounting body to take a degree of responsibility for the form and content of British corporate financial reports. RoAPs 12 and 15 focused on the enduring problem of whether and how to take account of changing prices when constructing published financial reports. This article reveals disagreement between practising and industrial members in general, concerning how to address this issue, and examines the way in which the Council of the ICAEW sought to resolve this internal conflict within the constraints imposed by the need to be seen to behave in the ‘public interest’. Major discord between the two main categories of membership emerged within the operation of the Taxation and Financial Relations (T&FR) Committee. What were judged by the ICAEW's leadership to be the extreme views of the industrial members were marginalized and suppressed by bypassing the normal channel for designing RoAPs and, instead, formulating them at the higher level of the Parliamentary and Law (P&L) Committee. The conflict between practising and industrial members continued in the period following the publication of RoAP 15, when further attempts were made to tackle the problem of accounting for inflation.

Date: 2004
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