France

In France, financial reportingas we know it today emerged from a programme of standardisation during the 1940s and 1950s, from the development of securities markets in the 1960s and 1970s and, finally, from a process of legal harmonisation during the 1980s. Prior to the 1940s, public accountability had been limited to two areas. The first was the presentation of an annual financial report by directors to the annual general meeting of incorporated companies which had been required under the companies law since 1867. The second was the filingof annual accounts by companies at the commercial registry which began in 1919. Two developments then had considerable impact on the emergence of modern financial reporting: the establishment of the profession of statutory auditor in 1935 and the growth of accounting standardisation which took place in the years after 1947. Each of these milestones in the development of modern financial reportingin France resulted from legislation initiated by the government and it can thus be concluded that successive French governments have been instrumental in the process of development (see Scheid and Walton, 1992). Until the adoption into French law of the Fourth European Directive on 30 April 1983, however, there was no statutory legislation for accounting. It should be noted that French law is based on statutes rather than cases, the obligations of the individual beingstipulated in laws, in other legal texts (such as decrees promulgated by the state) and in contracts.