Regulating British Corporate Financial Reporting in the Late Nineteenth Century

The regulation of the accounts and audit of British railways, public utilities and financial institutions in the second half of the nineteenth century has been regarded as a minor exception to the norm of a general lack of regulation of corporate financial reporting during this period. This paper establishes that these companies in fact constituted in value terms the major part of the corporate private sector. The paper argues that the reason for regulation was not primarily to protect investors but in order to control monopoly, privilege and safety. Regulatory requirements varied according to the class or size of company; sometimes applied to accounting records as well as financial statements; involved publication in many different ways; imposed uniformity for some businesses but not others; and covered measurement as well as disclosure. Auditing issues made the subject of regulation included: to whom should auditors report; who should appoint them; who could be an auditor?