| In 1990, the accounting profession and the British government worked together to establish a new regulatory framework for financial reporting in the United Kingdom (UK), the Financial Reporting Council (FRC) and its two subsidiaries, the Accounting Standards Board (ASB) and the Financial Reporting Review Panel (FRRP). The FRRP enforces companies' compliance with the ASB's accounting standards and the accounting provisions of the UK Companies Act. Only one study, Brandt et al. (1997), has examined the activities and effectiveness of the FRRP. This dissertation attempts to extend Brandt et. al (1997) and add to understanding of the origins and regulatory actions of the FRRP.; An institutional historical study addressed the general research question, how and what changed in regulatory space to make establishment of an enforcement agency acceptable in 1990 and not earlier? This examination of the change in regulatory space of UK financial reporting for the period 1969–90 pointed out the UK accountancy profession's repeated failure to gain compliance with accounting standards through political consensus. It also highlighted the profession's unwillingness to ensure compliance with standards. Non-compliance undermined the credibility of financial statements, motivating the government to establish a legal framework for an accounting standard setting process independent of the accountancy profession.; A descriptive empirical study investigated the FRRP's regulatory actions since 1990. Guided by regulatory theory, I developed a series of propositions to be examined in an empirical study. The FRRP's early regulatory actions appeared to be designed to restore the credibility of financial statements by forcing compliance with existing standards. Then, the FRRP shifted the focus of its regulatory actions to ensure immediate compliance with new standards. After establishing its authority as an enforcement body independent of the ASB, the FRRP has now integrated itself as a vital part of the accounting standard setting process, enforcing accounting standards on a pre-emptive basis. |
