In recent years, there has been a revolution in accounting. Not long ago, it was recognised that accounting was a subjective art and that accountants had to use their own judgement in producing ‘a true and fair view’ of a company’s activities. Recently, however, regulators and professional bodies have developed mandatory accounting standards. In many cases, the standards adopted have been complex, subjective and not generally accepted by the accounting profession.
In Unshackling Accountants Professor Myddelton, a chartered accountant and academic, examines these developments in detail. He looks at the history of and the arguments for and against detailed accounting standards: Myddelton concludes that, while there may be a case for the accounting profession to develop voluntary guidelines, the imposition of rigid standards is likely to prevent the art of accounting from evolving. Myddelton believes that the argument that more regulation and more uniformity are necessary to avoid scandals such as those at Enron and WorldCom is flawed. He argues that those scandals happened at a time when accounting practices were more regulated than ever before and in jurisdictions where practices were laid down in the greatest detail. Very often, in fact, bad practice is imposed by regulation and by accounting standards.