Despite seemingly similar language, the U.S. system of accounting and capital market regulation is far different from the British model and is sullying systems elsewhere as the global marketplace seeks convergence. At least that’s the view of Tim Bush, a British chartered accountant with Hermes Pensions Management in London, as described in a recent report, Divided by Common Language, published by the Institute of Chartered Accountants in England and Wales.
Bush describes the British model of accounting and regulation as based on shareholder rights and financial reporting under a single system of company law. He says the U.S. system focuses financial reporting and corporate oversight on stock market pricing, and that company law is fragmented because it is set at the state level. As standard setters and regulators seek convergence of accounting rules and financial reporting, Bush cautions against adoption of U.S. principles.
