A reflection on 'Company Financial Reporting' after ten years

In our book, Company Financial Reporting: A Historical and Comparative Study of the Dutch Regulatory Process (North-Holland, 1992), we were critical of certain conditions in which financial reporting was regulated and practiced, and we proposed several reforms. The editorial board of Maandblad voor Accountancy en Bedrijfseconomie kindly invited us to review and discuss the key points in the chapter containing our conclusions and recommendations in the light of developments since the end of 1991, when we completed our research and writing. This article constitutes our review and was completed in July 2002. It should be understood that this article is not an attempt to extend our original research into the 1990s. To do so would have required a far greater investment of effort in, for instance, collecting opinions through interviews than was called for by the article envisaged by the editor of this journal. What we attempt to do in this article is to give our interpretation of the salient facts as they presented themselves to us at the time of writing. Given the limited scope of this article, we obviously had to present our arguments succinctly. We realize that, to those involved in the complex policy-making underlying these events, our review may occasionally appear unsubtle or wide of the mark. In such cases, we hope that our review will be read as an invitation to bring alternative views in the open. This article is structured as follows. Sections 2 and 3 contain the core of the article, treating the standard-setting process and the mechanism of ensuring compliance with standards, respectively. Section 4 reviews developments in the environment of financial reporting, including the financial markets, the financial press and academia. Section 5 follows up on two specific observations made in our book. We end in section 6 with conclusions.