Batiz-Lazo, Bernardo and Billings, Mark (2009): Accounting Regulation and Management Discretion in a British Building Society, Circa 1960.
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This article explores the manipulation of published financial reports in order to counter the potentially unfavourable impact of newly introduced regulation. In this case the reported capital ratio of a major building society was enhanced using a sale and leaseback transaction with a related party and a change in depreciation policy, methods which reflected limited alternatives. Analysis of the case is set in the context of the mid-term performance of the building society sector and addresses the questions of whether the manipulations involved were within then-prevailing generally accepted accounting principles and why, despite disclosure in the society’s financial statements, these failed to attract public comment or concern, regulatory action or an audit qualification. In examining a major British mutual financial organisation we depart from traditional analyses of managerial discretion in accounting choices in manufacturing, mining and transport companies prior to the watershed Companies Act 1948.
|Item Type:||MPRA Paper|
|Original Title:||Accounting Regulation and Management Discretion in a British Building Society, Circa 1960|
|Keywords:||Accounting manipulation; Creative accounting; Sale and leaseback; Depreciation; Building societies; United Kingdom|
|Subjects:||N - Economic History > N2 - Financial Markets and Institutions > N24 - Europe: 1913-
M - Business Administration and Business Economics; Marketing; Accounting > M4 - Accounting and Auditing > M42 - Auditing
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information; Mechanism Design
|Depositing User:||Bernardo Batiz-Lazo|
|Date Deposited:||22. Nov 2009 23:44|
|Last Modified:||12. Feb 2013 06:10|
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