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International Corporate Reporting Global and Diverse
5° Edition Pauline Weetman Digital Instant Download
Author(s): Pauline Weetman, Ioannis Tsalavoutas, Paul Gordon
ISBN(s): 9781138364981, 1138364983
Edition: 5°
File Details: PDF, 32.76 MB
Year: 2020
Language: english
‘This is an outstanding new (fifth) edition of a well-established international
accounting textbook from a highly experienced team of authors. Notably,
there is a valuable focus on cultural and institutional influences along with a
comprehensive coverage of key reporting issues.’
—Professor Sid Gray,
University of Sydney, Australia

‘International Corporate Reporting is always part of my recommended textbooks

to students across a wide variety of masters’ courses I have taught. It is a must
for those who want to understand the current global corporate reporting
landscape. And it is truly international in perspective!’
—Paul André,
PhD, CPA-CA, Professor of Accounting,
HEC Lausanne, Switzerland

‘International Corporate Reporting is about anything corporate reporting that

is not financial accounting theory or financial statement preparation. It is
logically structured, combines breadth with depth, and is impressive in its
academic treatment of a great variety of relevant topics.’
—Carien van Mourik,
Senior Lecturer in Accounting,
The Open University,
Faculty of Business and Law, UK

‘The book discusses a good variety of topics related to international

accounting practice and regulation. Chapters are laid out in an easy-to-follow
fashion, offering different ways in which to engage with the content, from
brief overviews to detailed case studies. A very worthwhile read for those
interested in the topic!’
—Anna Samsonova-Taddei,
Professor of Accounting, Alliance Manchester
Business School, University of Manchester,
PhD Director (Accounting Pathway), UK
International Corporate
Reporting

This textbook provides a comprehensive overview of international

corporate reporting which enhances students’ understanding of diversity and
convergence in the field.
The authors discuss the institutional and cultural context in which
international corporate reporting has developed over the years as well as the
global reach of IFRS Standards from the IASB throughout and beyond the
European Union, into interest groups and emerging economies. Other key
elements explored throughout the book include assurance through auditing
and corporate governance, narrative reporting, strategic and corporate social
responsibility, group accounting, current accounting issues and taxation in
corporate reports. Indicative research examples show how the methods used
in research papers may be understood and applied. Case studies outline short
projects based on corporate cases, with related links to material on corporate
websites. Helpful and reliable sources of information and data are identified
through hyperlinks to accessible websites. End-of-chapter questions encourage
discussion of the main issues. Throughout there is a focus on accountability
and the information needs of stakeholders.
This new edition of a classic text is fully revised and updated in order to
remain essential reading for students of international accounting and corporate
reporting globally. The book will be an invaluable resource for postgraduate
taught programmes and final-year undergraduate courses in accounting,
finance and business studies.

Pauline Weetman is Professor Emerita in Accounting at the University of

Edinburgh and holds the Distinguished Academic Award 2005 of the British
Accounting and Finance Association. She is a co-editor of The Routledge
Companion to Accounting in Emerging Economies.

Ioannis Tsalavoutas is Professor of Accounting and Finance at the

University of Glasgow and holds a PhD in Accounting from the University of
Edinburgh. His research on financial accounting and reporting has featured in
leading journals. He is a co-editor of The Routledge Companion to Accounting in
Emerging Economies.
Paul Gordon is a lecturer in accounting and finance at Heriot-Watt
University, having previously held positions at Glasgow, Aberdeen and
Bangor. His teaching interests include international accounting and
financial analysis.
International
Corporate Reporting
Global and Diverse

5th Edition

Pauline Weetman, Ioannis Tsalavoutas

and Paul Gordon
Fifth edition published 2020

by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN

and by Routledge
52 Vanderbilt Avenue, New York, NY 10017

Routledge is an imprint of the Taylor & Francis Group, an informa business

© 2020 Pauline Weetman, Ioannis Tsalavoutas and Paul Gordon

The right of Pauline Weetman, Ioannis Tsalavoutas and Paul Gordon to be identified as authors
of this work has been asserted by them in accordance with sections 77 and 78 of the Copyright,
Designs and Patents Act 1988.

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form
or by any electronic, mechanical, or other means, now known or hereafter invented, including
photocopying and recording, or in any information storage or retrieval system, without permission
in writing from the publishers.

Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are
used only for identification and explanation without intent to infringe.

First edition published by Financial Times Professional Limited 1998

Fourth edition published by Pearson Education 2008

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data

Names: Weetman, Pauline, author. | Tsalavoutas, Ioannis, author. |
Gordon, Paul, author.
Title: International corporate reporting : global and diverse /
Pauline Weetman, Ioannis Tsalavoutas and Paul Gordon.
Description: 5th edition. | Abingdon, Oxon ; New York, NY : Routledge, 2020. |
Previous edition entered under: Clare B. Roberts. | Includes bibliographical
references and index.
Identifiers: LCCN 2019049117 (print) | LCCN 2019049118 (ebook) |
ISBN 9781138364981 (hbk) | ISBN 9781138364998 (pbk) |
ISBN 9780429430985 (ebk)
Subjects: LCSH: International business enterprises—Finance. | Accounting—
Standards—International cooperation.
Classification: LCC HF5686.I56 R634 2020 (print) | LCC HF5686.I56 (ebook) |
DDC 657/.96—dc23
LC record available at https://lccn.loc.gov/2019049117
LC ebook record available at https://lccn.loc.gov/2019049118

ISBN: 978 - 1-138 - 36498 - 1 (hbk)

ISBN: 978 - 1-138 - 36499 - 8 (pbk)
ISBN: 978 - 0-429 - 43098 - 5 (ebk)

Typeset in Bembo
by Apex CoVantage, LLC

Visit the companion website: www.routledge.com/cw/weetman

 To the many thousands of students who have enriched our academic lives
and to our children, Aristotle, Athena, Linda, Heather and Ian, for sharing us
with them. Also to Dionysia, whose sustained sensitive support is profoundly
appreciated by Yannis. Her encouraging smile and intellectual energy have
perpetually inspired him in all his intellectual endeavours.
Contents

List of exhibits and case studies xvii

Author biographies xix
Prefacexx
Acknowledgementsxxiii

Part I INSTITUTIONS, CULTURE AND

RESEARCH METHODS 1

1 Global corporate reporting 3

Learning outcomes 3
1.1 Current trends in global corporate reporting 3
1.2 Overview of corporate reporting 7
1.3 Our approach in this book 10
1.4 The language we use 11
1.5 Establishing global authority in corporate reporting 12
1.6 Challenging globalisation 14
1.7 Summary and key points 16
Questions17
References18

2 Institutional and external influences 19

Learning outcomes 19
2.1 Introduction 20
2.2 Factors influencing the development of corporate
reporting21
2.3 The political and economic system 22
2.4 The legal system 24
2.5 The taxation system 26
2.6 The corporate financing system 27
x C ontents

2.7 The accounting and auditing profession 30

2.8 Religious institutions 31
2.9 Other influences 33
2.10 Summary and key points 34
Questions35
References37

3 Cultural influences 40
Learning outcomes 40
3.1 Introduction 41
3.2 Defining culture 41
3.3 Culture and business 47
3.4 Culture and accounting 48
3.5 Is culture an important influence on
accounting?50
3.6 Indicative research examples 52
3.7 Summary and key points 55
Questions56
References57

4 Classification of accounting systems 61

Learning outcomes 61
4.1 Introduction 62
4.2 Reasons for classifying accounting systems 62
4.3 Deductive and inductive classification 63
4.4 Approaches to classification 64
4.5 Development of classification studies 68
4.6 Is classification successful? 74
4.7 Summary and key points 75
Questions76
References77

5 Measuring harmonisation and diversity 80

Learning outcomes 80
5.1 Introduction 80
5.2 Similarities and differences in the
accounting methods used 81
C ontents xi

5.3 Good news, bad news and earnings

‘conservatism’86
5.4 Similarities and differences in narrative
disclosures91
5.5 Summary and key points 95
Questions95
References96
Part II GLOBAL REACH OF INTERNATIONAL
STANDARDS99

6  eveloping international financial

D
reporting standards 101
Learning outcomes 102
6.1 Introduction 102
6.2 Structure for setting IFRS
Standards102
6.3 Operation of the IASB 107
6.4 Challenges to the IASB 111
6.5 The International Federation of
Accountants114
6.6 Indicative research examples 115
6.7 Summary and key points 118
Questions119
References120

7 European accounting and reporting 124

Learning outcomes 124
7.1 Introduction 125
7.2 European Union (EU) 125
7.3 Accounting in EU member states 127
7.4 National standard setters in Europe 132
7.5 European Securities Markets
Authority (ESMA) 134
7.6 Indicative research examples 135
7.7 Summary and key points 139
Questions140
References145
xii C ontents

8  lobal organisations and interest

G
groups149
Learning outcomes 149
8.1 Introduction 150
8.2 Political influence 150
8.3. Initiatives from the business
community152
8.4 Cooperation in the accountancy
profession159
8.5 Regional groups in the accountancy
profession161
8.6 Indicative research examples 165
8.7 Summary and key points 167
Questions168
References169

9  roadening the influence of IFRS

B
Standards171
Learning outcomes 171
9.1 Introduction 172
9.2 Differential reporting 172
9.3 Balancing national control with IFRS
convergence175
9.4 Public sector accounting standards 179
9.5 Summary and key points 184
Questions185
References186
Part III ASSURANCE189

10 Auditing191
Learning outcomes 191
10.1 Introduction 192
10.2 International Auditing and Assurance
Standards Board 192
10.3 National monitoring and review of
audit firms 194
10.4 Developing the audit report 197
C ontents xiii

10.5 Competition and audit reform 202

10.6 Indicative research examples 205
10.7 Summary and key points 207
Questions208
References210

11 Corporate governance 212

Learning outcomes 212
11.1 Introduction 213
11.2 Organisation for Economic
Co-operation and Development
(OECD)214
11.3 Corporate governance models 216
11.4 Corporate governance codes 216
11.5 Enforcement and ratings 222
11.6 Indicative research examples 224
11.7 Summary and key points 228
Questions229
References230
Part IV NARRATIVE CORPORATE REPORTING 233

12  anagement commentary and strategic

M
reporting235
Learning outcomes 235
12.1 Introduction 236
12.2 Management discussion and analysis
in the US 236
12.3 Management reports through the EU
Accounting Directive 242
12.4 IASB Management commentary 244
12.5 Remuneration reports 245
12.6 Dual listing and investor communication 246
12.7 The meaning of ‘transparency’ 247
12.8 Indicative research examples 249
12.9 Summary and key points 251
Questions252
References253
xiv C ontents

13  orporate social responsibility

C
and sustainability 255
Learning outcomes 256
13.1 Introduction 256
13.2 Initiatives supported by the United
Nations256
13.3 Governmental-backed strategies 262
13.4 Global networks and interest groups 263
13.5 Market ratings 267
13.6 Is CSR reporting effective for
sustainability?269
13.7 Indicative research examples 270
13.8 Summary and key points 275
Questions276
References278
Part V ACCOUNTING AND TAXATION 281

14 Group reporting 283

Learning outcomes 283
14.1 Introduction 284
14.2 Group accounting 284
14.3 Goodwill and impairment 291
14.4 Associates and joint ventures 293
14.5 Foreign currency and hyperinflation 300
14.6 Summary and key points 302
Questions303
References304

15 Current issues in accounting 306

Learning outcomes 306
15.1 Introduction 307
15.2 Fair value accounting 307
15.3 Investment properties 310
15.4 Revenue recognition 311
15.5 Research and development expenditure 313
C ontents xv

15.6 Leases 316

15.7 Alternative performance measures
(non-GAAP reporting) 318
15.8 Indicative research examples 320
15.9 Summary and key points 323
Questions324
References325

16 Corporate tax reporting 328

Learning outcomes 328
16.1 Introduction 329
16.2 Tax systems 329
16.3 IAS 12 Accounting for income taxes334
16.4 Tax planning and transfer pricing 336
16.5 Country-by-country reporting 339
16.6 Indicative research examples 345
16.7 Summary and key points 347
Questions348
References349
Part VI NATIONAL INTERESTS IN AN
ENVIRONMENT OF GLOBAL
REPORTING351

17 United States 353

Learning outcomes 353
17.1 Introduction 354
17.2 Institutional and external influences 354
17.3 Development of accounting
regulation356
17.4 The corporate reporting system 359
17.5 Auditing and corporate governance 363
17.6 Indicative research examples 364
17.7 Summary and key points 367
Questions368
References369
xvi C ontents

18 China372
Learning outcomes 372
18.1 Introduction 373
18.2 Institutions 373
18.3 Development of accounting
regulation377
18.4 Corporate reporting framework 380
18.5 Auditing and corporate
governance382
18.6 Hong Kong 384
18.7 Indicative research examples 386
18.8 Summary and key points 389
Questions390
References391

19 Japan394
Learning outcomes 394
19.1 Introduction 395
19.2 Institutions 395
19.3 External influences on accounting 398
19.4 Development of accounting
regulation399
19.5 The corporate reporting system 401
19.6 Auditing and corporate governance 404
19.7 Indicative research examples 407
19.8 Summary and key points 409
Questions409
References410

Index412
Exhibits and case studies

Exhibits

1.1 Top 100 global companies 2018 based on market capitalisation 5

1.2 Top 500 global companies 2018 based on revenue 6
1.3 Components of corporate reporting 8
2.1 The institutional influences on an accounting system 21
2.2 Major equity markets, 2018 28
3.1 Cultural dimensions identified by Hofstede (1980) 42
3.2 Two further dimensions in ‘six dimensions’ of Hofstede-Insights 44
3.3 Cultural value orientation according to Schwartz 45
3.4 Summary of Schwartz’s pairings of cultural values 46
3.5 Accounting values identified by Gray (1988) 49
3.6 The relationship between cultural dimensions and accounting values 50
4.1 A possible two-dimensional classification 65
4.2 Dendrogram for cluster analysis 66
4.3 Sample report of factor loadings for principal component analysis 67
4.4 A possible hierarchical classification 68
5.1 Calculation of the Herfindahl index 82
5.2 Calculation of the C-index 84
5.3 Diagrammatic representation of results showing good news/bad news
conservatism as predicted by Basu (1997) 88
6.1 Major stages in the development of international standards 102
6.2 Time lines of due process 107
6.3 US GAAP/IFRS convergence 112
7.1 Controversial stages in the development of IAS 39 129
7.2 Status of IFRS Standards in Europe 136
10.1 Main headings for an audit report under ISA 700 (revised) 198
10.2 Typical key audit matters 199
10.3 Materiality200
10.4 Main headings for an audit report under PCAOB 200
10.5 Typical wording of opinion paragraph in Japan 202
10.6 Market concentration of Big 4 audit firms 203
10.7 Top 10 accounting firms in China, 2017 204
12.1 Extract from table of contents of Regulation S-K 237
12.2 Brief summary of contents of the MD&A report 238
12.3 Quantitative and qualitative disclosures about market risk 240
12.4 Forward-looking statements – typical wording 241
12.5 Main contents of a Management Report and a Corporate Governance
report under the Accounting Directive 243
13.1 List of GRI Standards 257
13.2 The Ten Principles of the UN Global Compact 259
xviii E xhibits and case studies

13.3 The 17 Sustainable Development Goals 259

13.4 Principles for Responsible Investment 261
13.5 Surveys of Corporate Social Responsibility and Sustainability Disclosure 272
13.6 Quantitative trends in corporate responsibility reporting 274
14.1 Acquisition accounting compared with uniting of interests accounting 287
14.2 Equity accounting 294
15.1 Main examples of fair value (FV) use in IFRS Standards 308
15.2 Comparison of investment properties with property, plant and equipment 311
15.3 Effect of bringing operating leases on balance sheet 317
15.4 Summary of IOSCO guidance (2016) on reporting non-GAAP measures 319
16.1 Tax treatment in calculation of taxable income in three countries 330
16.2 Components of total tax revenues as percentages, 2016 331
16.3 Relative significance of tax on company profits from 2000 to 2016 331
16.4 National rates of tax on company profits 332
16.5 Effective rate of tax on company profits (World Bank) 333
16.6 Illustration of tax reconciliation 335
18.1 Classes of shares issued by Chinese companies 375
18.2 Examples of differences between ASBEs and IFRS Standards 379
18.3 Progress with ASBEs 379
18.4 Levels of accounting law and regulation in China 380
18.5 H shares and Red Chip shares 385
19.1 Sections of the Tokyo Stock Exchange 397
19.2 Typical wording to indicate convenience translation 402
19.3 METI 2017 Guidance 404

Case studies

2.1 Basic principles of Islamic accounting practice 32

6.1 Members of IASB July 2019 104
6.2 Developing an accounting standard: revenue recognition 109
8.1 Contents of an Integrated Report 153
8.2 Basis for an Integrated Report 154
8.3 Reporting the capitals 155
8.4 Strategic objectives 156
8.5 Indication of applying the IESBA Code 160
8.6 Bahrain Islamic Bank annual report 2018 (in English) 162
11.1 Ericsson, Sweden 219
11.2 The Axiata Group, Malaysia 221
11.3 Germany (2017) 223
12.1 Main contents of remuneration reports – GSK and Tiscali 245
13.1 GRI applied in the annual report 258
13.2 UN Global Compact 260
13.3 Independent assurance statement 264
13.4 Location of ESG information 268
14.1 Equity accounting for associated companies and joint ventures 298
15.1 Revenue recognition by two retail chain stores 312
15.2 Treatment of R&D costs under US GAAP and IFRS 314
16.1 Banks342
16.2 Extractive industries: comparing the UK company BP plc with the
French company Total SA 343
19.1 First time adopters 401
Author biographies

Pauline Weetman is Professor Emerita in Accounting at the University of

Edinburgh. Her research publications cover narrative corporate reporting and
comparative studies of issues in accounting measurement and disclosure. She
has supervised doctoral theses and student dissertations across a range of issues
from international corporate reporting and has taken a particular interest in
the development of corporate reporting in emerging economies. She is joint
editor, with Tsalavoutas, of The Routledge Companion to Accounting in Emerging
Economies. She has been the editor of Accounting and Business Research and
received the Distinguished Academic Award of the British Accounting and
Finance Association in 2005.

Ioannis Tsalavoutas is Professor of Accounting and Finance at the

University of Glasgow. He is also Chairman of the European Financial
Reporting Network (EUFIN) and a member of the Corporate and Financial
Reporting Panel of The Institute of Chartered Accountants of Scotland. His
research interests cover financial accounting and reporting. In particular, he
investigates companies’ reporting practices under International Financial
Reporting Standards across different jurisdictions, along with any economic
consequences that may arise from divergence in practice. He has published
papers in leading journals and has given oral evidence inter alia to members of
the International Accounting Standards Board.

Paul Gordon is a lecturer in accounting and finance at the Edinburgh

Business School, Heriot-Watt University, having previously held posts at
Glasgow, Aberdeen and Bangor. He is a chartered accountant with a first
degree in accounting from the University of Kent and a Master’s degree from
Lancaster University. He co-edited, with Gray and Coenenberg, International
Group Accounting: Issues in European Harmonisation, reporting experiences across
Europe of implementing the Seventh Directive. He co-authored, with Gray,
the UK volume of the Routledge series on European Financial Reporting in
the mid-1990s. Teaching interests include international accounting, corporate
taxation and financial analysis.
Preface

Aim of the book

This book aims to inform postgraduate and undergraduate courses in

accounting and finance or in business studies by developing an awareness
and understanding of the current state of international corporate reporting.
This is done while providing the institutional and cultural context in which
international corporate reporting has developed over the years. Globally there
are continuing institutional developments to harmonise corporate reporting to
high standards. At the same time, there remains diversity in national practices
where local institutions and cultures prevail. The book aims also to enhance
students’ understanding of the wide body of research into international
corporate reporting by explaining research methods used for comparative
studies and by providing indicative research examples that may encourage
students to apply such techniques in projects or dissertations.

Target readership

The book is targeted at postgraduate MSc or MBA taught courses and at

honours-level final-year undergraduate courses. It provides a basis for a self-
contained examinable course which could include a coursework project. By
providing the institutional and cultural theoretical framework plus suitable
indicative research examples, it offers ideas for research projects that would
be suitable for dissertations and could also help students in the initial stages of
planning doctoral research study.

Structure of the book

The book has six parts, each of which deals with a separate aspect of
international corporate reporting. The full text is suitable for a full-length
course of one semester, but the structure allows lecturers to plan selectively
for shorter courses or to incorporate material within broader programmes.
We summarise the structure here and we outline the contents of each Part in
Section 1.3 of Chapter 1.
P reface xxi

Book structure

Part I
INSTITUTIONS, CULTURE AND RESEARCH METHODS
Chapter 1 Chapter 2 Chapter 3
Global corporate Institutional and external Cultural influences
reporting influences
Chapter 4 Chapter 5
Classification of accounting systems Measuring harmonisation and diversity
Part II
GLOBAL REACH OF INTERNATIONAL STANDARDS
Chapter 6 Chapter 7 Chapter 8 Chapter 9
Developing IFRS European Global organisations Broadening the
accounting and and interest groups influence of IFRS
reporting Standards
Part III
ASSURANCE
Chapter 10 Chapter 11
Auditing Corporate governance
Part IV
NARRATIVE CORPORATE REPORTING
Chapter 12 Chapter 13
Management commentary and strategic Corporate social responsibility and
reporting sustainability
Part V
ACCOUNTING AND TAXATION
Chapter 14 Chapter 15 Chapter 16
Group reporting Current issues in Corporate tax reporting
accounting
Part VI
NATIONAL INTERESTS IN AN ENVIRONMENT OF GLOBAL REPORTING
Chapter 17 Chapter 18 Chapter 19
United States China Japan
xxii P reface

Particular features

From our experience with previous editions of this book and feedback
from students and lecturers, the following features have been identified as
particularly helpful:

Recognising continuing diversity despite global initiatives encourages students to

contrast harmonisation and diversity in comparative studies of corporate
reporting.
Focus on accountability and the information needs of stakeholders in corporate
reporting.
Transparency and disclosure through mandatory and voluntary narrative
information in corporate reports, explaining the legislation and guidance
available and giving links to examples of the range of practices available.
Indicative research examples showing how the methods used in research
papers may be understood and applied in postgraduate and final-year
undergraduate courses.
Case studies where we outline how a short project may be developed based on
a corporate case, with related links to material on corporate websites.
Helpful and reliable sources of information and data through hyperlinks to websites
that provide suitable access for students.
Learning outcomes and end-of-chapter questions that encourage students to make
comparisons, discuss issues and follow up references to further material as a
basis for tutorial or seminar preparation.

This textbook complements a companion volume of invited contributions

with a particular focus on emerging economies, all written by leading
researchers. In the Routledge Companion to Accounting in Emerging Economies
[Weetman, P. and Tsalavoutas, I. (eds.) (2020), Routledge], students will find
encouragement to apply the framework set out in this book in developing
research investigation into emerging economies.
Acknowledgements

We are immeasurably grateful to Professor Clare Roberts, Emeritus Professor

of Accounting at the University of Aberdeen, for agreeing to the development
of a new edition of this work. She inspired the creation of the book and
in particular the interpretation of research findings through comparisons
of institutional and cultural influences. We hope we have preserved her
enthusiasm for all aspects of international corporate reporting. We thank
Professor Jason Xiao and Dr Akira Yonekura for comments on the chapters on
China and Japan, respectively and we appreciate observations from Professor
Robert Larson on the US chapter.
We would like to give special thanks to all the staff at Routledge who have
assisted with the editorial and production stages of the book.
 PART I

Institutions, culture and

research methods
 CHAPTER 1

Global corporate
reporting
Contents

Learning outcomes 3
1.1 Current trends in global corporate reporting 3
1.2 Overview of corporate reporting 7
1.3 Our approach in this book 10
1.4 The language we use 11
1.5 Establishing global authority in corporate reporting 12
1.6 Challenging globalisation 14
1.7 Summary and key points 16
Questions17
References18

Learning outcomes
After reading this chapter you should be able to:
• Discuss current trends in global corporate reporting.
• Define and explain the main components of corporate reporting, including
assurance.
• Discuss the benefits and limitations of studying and researching in the
English language.
• Discuss ways in which global authority over corporate reporting may be
established.
• Discuss the challenges to globalisation of corporate reporting.

1.1 Current trends in global corporate reporting

The strongest trend in global corporate reporting of recent years has been the
increasing emphasis on reporting corporate social responsibility (CSR), to
the point where high-quality CSR information is seen as essential by those
evaluating investment possibilities. Information about accountability to society,
communities, employees, customers and the public interest is now seen as an
indispensable feature of global corporate reporting. It is a part of the wider
focus on narrative reporting to explain the activities of the business in terms
of its effect on society and its contribution to sustainability of the planet.
4 I nstitutions , culture and research methods

There has been a proliferation of international organisations setting principles,

standards and guidelines for reporting aspects of CSR.
The International Financial Reporting Standards (IFRS Standards)
governing the financial statements have matured over 20 years since the
International Accounting Standards Board (IASB) began its work in 2000
(building on and incorporating the International Accounting Standards
(IAS Standards) established by its predecessor the International Accounting
Standards Committee (IASC) from 1973). Assurance has been enhanced
through developments in corporate governance and auditing. These
remain a focus of concern, particularly when businesses fail unexpectedly,
but the exciting issues in global corporate reporting are found in the
narrative reports of management strategy and in the CSR reports. There
have also been demands for those who govern companies to give much
more narrative description of the business strategy and how that strategy is
achieved.
When the International Organization of Securities Commissions
(IOSCO) made the significant decision to endorse IAS Standards in 2000
for use in members’ stock exchanges,1 in order to facilitate cross-border
offerings and listings by multinational enterprises and to promote further
development of internationally accepted accounting standards, it opened the
door to acceptance of global accounting standards set by the IASB. (IOSCO
recommended that its members allow multinational issuers to use IAS
Standards, as supplemented by reconciliation, disclosure and interpretation
where necessary to address outstanding substantive issues at a national or
regional level.) The IASB then faced the challenge of establishing confidence
in its independence as a standard setter, while having no direct powers of
enforcement or scrutiny. In the period from 2000 to 2005 the IASB revised
several standards to meet the requirements of IOSCO and also agreed to
maintain a ‘stable platform’ of standards2 to gain the support of the European
Union (EU) in endorsing IFRS Standards for use in the EU. In 2006 the IASB
announced3 that 2009 would be the first date of required implementation of
any new standards. That would provide countries yet to adopt IFRS Standards
with a clear target date for adoption and would also provide four years of
stability in the IFRS-based platform of standards for those companies that
adopted IFRS Standards in 2005.
The IASB and the legislators of the EU and the US began using the
language of ‘convergence’ while preserving their respective territorial
positions. In particular, in 2007 the SEC in the US removed the requirement
for European companies to reconcile IFRS-based financial statements to
US generally accepted accounting principles (US GAAP) when reporting
to US stock markets. There was a period, up to 2010, when progress was
made in discussions between the IASB and the US Financial Accounting
Standards Board (FASB) to further converge their accounting standards.
Tensions were always present. The European Commission retained its right
of political control over the legal process across member states. The Securities
and Exchange Commission (SEC) in the US demanded reassurance about
mechanisms for enforcement of high-quality international accounting
standards that would retain a level playing field for US companies. Since 2010
it has become apparent that the IASB and FASB continue to develop two
1 : G lobal corporate reporting 5

distinct sets of accounting standards, although much more closely aligned as a

result of the years of convergence activity.
To compare the use of IFRS Standards and US GAAP, Exhibit 1.1
summarises the country of registration of the largest 100 companies by market
capitalisation in 2018. Of these, 55 companies reported their financial results
using US GAAP, 28 reported their financial results under IFRS Standards and
17 applied their own national accounting standards, all of which have made
substantial progress on convergence with IFRS Standards. This appears to
indicate an evenly spread influence of US GAAP and IFRS Standards but the
US regulatory influence on corporate reporting extends to narrative reports
(see Chapters 12 and 17) of foreign issuers listed on US markets. Of the 46
non-US companies, 22 are listed on the NYSE and another 14 have their
shares traded on the OTC market in the US.

Exhibit 1.1 Top 100 global companies 2018 based on market

capitalisation

Number Note

US 54 1
EU (with UK) 18 2
China (with Hong Kong) 14 3
Asia Pacific excluding Japan and China 5 4
Europe non-EU 3 5
North America excluding US 2 6
Middle East and Africa 2 7
Japan 2 8
Total 100
Note 1 US companies follow US GAAP (see Chapter 17); 43 are listed on the NYSE and
11 (including the top 4) on NASDAQ.
Note 2 EU listed companies apply IFRS Standards (see Chapter 6).
Note 3 In mainland China and Hong Kong, listed companies apply national accounting
standards that are largely converged with (or based on) IFRS Standards (see
Chapter 18).
Note 4 This category includes two Indian companies and one each from Taiwan, South
Korea and Australia.
Taiwanese listed companies have a choice of using Full IFRS Standards or IFRS
Standards as modified by national standards board. The company in this sample has
applied full IFRS Standards. South Korean listed companies are required to use K-IFRS
(similar to IFRS Standards but with some timing differences). Australian and Indian
companies must apply their respective national accounting standards. Australian
standards are largely identical to IFRS Standards; those of India are based on IFRS
Standards but retain some significant differences from IFRS Standards (for India, see
Chapter 9).
6 I nstitutions , culture and research methods

Note 5 Swiss listed companies are required to prepare their financial statements using
either IFRS Standards or US GAAP. The three non-EU Swiss companies each apply IFRS
Standards.
Note 6 Both are Canadian companies. The Canadian Accounting Standards Board
requires domestic listed companies to use IFRS Standards.
Note 7 One is a Saudi Arabian company and one is a South African company. Both
countries require domestic listed companies to apply IFRS Standards.
Note 8 In Japan, domestic listed companies have a choice of financial reporting
standards to apply (see Chapter 19). Of the two companies in this sample, one adopts
US GAAP (Toyota) and one applies IFRS Standards (Softbank).
Extracted from: www.pwc.com/gx/en/services/audit-assurance/publications/global-
top-100-companies-2018.html

Exhibit 1.2 Top 500 global companies 2018 based on revenue

Country/Region Number of As a
companies percentage

US 126 25.2%
EU (with UK) 122 24.4%
China (with Hong Kong) 111 22.2%
Japan 52 10.4%
Asia Pacific excluding Japan and China 44 8.8%
Europe non-EU 20 4.0%
North America excluding US 16 3.2%
South America 7 1.4%
Middle East and Africa 2 0.4%
Total 500 100.0%
Source: https://fortune.com/global500/

Researchers in corporate reporting will often determine their sample

based on a size criterion. In Exhibit 1.1, using market capitalisation, the US
companies dominate. As an alternative, Exhibit 1.2 uses annual revenue as the
measure of size. Here US companies are less significant and the proportion of
companies from other parts of the world increases.
While convergence in accounting standards was taking place in the late
1990s and early 2000s, there were many other activities contributing to trends
of convergence in global corporate reporting. Assurance took on a larger
profile, particularly as a result of the South-East Asian economic crisis starting
in 1997 and the global financial crisis of 2007–2008. Corporate governance
took on a higher profile, either through the introduction of corporate
1 : G lobal corporate reporting 7

governance codes (see Chapter 11), supported by stock exchange enforcement,

or through corporate legislation (for example in the US, see Chapter 17
Section 17.3.4). There has been a tendency, on the part of those who provide
finance and resources to business, to assume that corporate governance codes
developed in Anglo-American countries provide the model to be applied
universally, even though they may not always fit well with the different
institutions, business structures and cultures of emerging economies. Auditing
standards have been developed by the International Auditing and Assurance
Standards Board (IAASB). Although they have not yet reached the same
level of global acceptance as IFRS Standards, they are increasingly adopted
or adapted within national audit legislation, raising the standards of auditing
globally but relying also on improved education within the audit profession
and the application of high ethical standards.
We discuss in Chapters 12 and 13 how narrative reporting has grown
to explain, augment and complement the financial information and formal
assurance. As the trend towards narrative reporting increases, there is emerging
an interesting competition for dominant position between the narrative
reports and the audited financial statements. The use of websites as the location
of corporate reports means that there is much more flexibility for companies
to choose the presentation and emphasis on different components of corporate
reporting. They are no longer constrained by a paper-based document. This
presents new challenges to the academic researcher in defining the bounds of
corporate reporting and in making global comparisons.4
In Section 1.2 we define the components of corporate reporting that we
explore in subsequent chapters.

1.2 Overview of corporate reporting

Exhibit 1.3 sets out what we mean by ‘corporate reporting’ as a collective

description of the components of the annual reporting process of companies.
It shows the words we will use in the rest of the book. We explain the words
in this section.
An accounting system is the collection of regulations, guidance and practice
that is identifiable for a particular country or jurisdiction, or for a group of
countries or jurisdictions. It includes the practices that have evolved over time
which may not be formally codified but are acknowledged as accepted in the
country or jurisdiction. Such practices may reflect traditions of institutions and
culture. We refer to ‘country or jurisdiction’ because the rule of law, as it affects
an accounting system, does not always run precisely to national borders. For
example, the EU has some legal powers that sit above the laws of the separate
member states. In other matters the laws of the member states are applied. In
the United States (US) there is federal law applicable across the entire US,
and there is state law set and applied within each state. Hong Kong is a special
administrative region of the People’s Republic of China (PRC) but retains a
separate legal system distinct from that of the PRC, under the principle of ‘one
country, two systems’.
The work of the IASB provides accounting standards and related guidance
that are accepted in many countries. The IASB’s standards and guidance
are incorporated within the wider accounting system of the country or
8 I nstitutions , culture and research methods

Exhibit 1.3 Components of corporate reporting

Corporate reporng

Accounng Assurance

Accounng system Auding Corporate governance

Accounng
regulaons, standards Accounng pracce
and guidance

Financial statements and financial reporng

plus
Non-financial reporng

jurisdiction. Although the IASB’s standards and guidance have a global reach,
the accounting systems within which they are incorporated may retain specific
local characteristics that affect comparability across systems. When entities
apply accounting standards, they explain their approach in the financial
statements by including a statement of their accounting policies. Some
standards may allow more than one accounting method, which is explained
within the accounting policy. For example, there may be an accounting policy
to depreciate non-current assets, with a choice of method such as straight-line,
reducing balance or unit-of-production allocation of cost.
The abbreviation GAAP is frequently used as shorthand for ‘generally
accepted accounting principles’. However, as pointed out by Evans (2004),
this is often interpreted as having a narrow meaning which refers to GAAP
in Anglo-American countries, in particular in the US. Thus ‘US GAAP’ is
a description of an accounting system identifiable to the US. The broader
meaning, discussed by Evans (2004) with specific examples, is that GAAP is
used in its literal sense for accounting principles, rules or practices that are
generally accepted at a particular time in a particular accounting (sub-)culture,
independent of their source and their relationship to legislation or professional
pronouncements.
Taking a specific example of Germany, Evans (2004) explains that the
German term Grundsätze ordnungsmäßiger Buchführung (abbreviated as GoB)
means ‘principles of orderly accounting’. However, GoB is sometimes translated
into English as ‘German GAAP’. This translation is problematic. Evans
expresses the concern that if GoB is translated as GAAP, then English speakers
will seize on the aspects of their respective accounting culture (such as US
1 : G lobal corporate reporting 9

GAAP) with which they are familiar and generalise this label in a way which
may make it harder for them to grasp the meaning of the German concept.
In contrast, Tsalavoutas et al. (2012) point out that in using the term
‘Greek GAAP’ in the context of their study, they mean codified accounting
rules, in particular Law 2190/20 and Presidential Decree (PD) 186/92 (Tax
Law – known also as Code of Books and Records) and pronouncements of
the Committee of Accounting Standardisation and Auditing (ELTE). This is a
narrow definition of GAAP compared to the view from Germany.
This reflection on the use of the abbreviation ‘GAAP’ means that if we see
the terms ‘PRC GAAP’ applied to corporate reporting in China, or ‘Japanese
GAAP’ applied to Japan, we need to look carefully at the detail and context
(as discussed in Chapters 18 and 19, respectively).
The term financial reporting is usually applied to the reports prepared by
managers5 of an entity in reporting their stewardship of financial resources
to those who have entrusted resources to their care. The resources provided
may initially be in the form of finance, but this finance is then applied to
acquire other forms of resource, tangible or intangible. The finance is also
used to carry out the activities of the entity. Those who provided the finance
are expecting to see how the resources have been safeguarded, and how they
will continue to be used for the benefit of the business in the future. Other
stakeholders will have an interest in the financing and future prospects of the
entity. Financial reporting will require financial statements as a basic set of
information. Three primary financial statements commonly observed are:

• The statement of financial position (balance sheet)

• The statement of profit or loss (income statement)
• The statement of cash flow

This basic set is then expanded by different standard setters and different
regulators, in order to achieve the accountability expected in a particular
jurisdiction. For example, the IASB in the International Accounting Standard
IAS 16 defines the primary financial statements as:

(a) a statement of financial position (balance sheet)

(b) an income statement (profit and loss statement)
(c) a statement of other comprehensive income
[(b) and (c) may be combined in a single statement of comprehensive
income]
(d) a statement of changes in equity
(e) a statement of cash flows

The financial statements will usually require explanatory notes, defined in

legislation or accounting standards. Further narrative explanations (sometimes
called a ‘management discussion’ or ‘management commentary’) may be
required by legislation, accounting standards and external stakeholders, to
provide the perspective of those who manage the entity and to discharge
their accountability. These further narrative explanations are usually provided
separately from the notes accompanying the financial statements. They
usually precede the financial statements and their notes in an annual report.
Depending on the jurisdiction, plus established custom, the titles of such
10 I nstitutions , culture and research methods

narrative reports could include a chairman’s statement, president’s letter, chief

executive officer’s report, directors’ report, management discussion and analysis,
management commentary, chief finance officer/finance director’s report, and
remuneration report (Chapter 12).
The corporate report will include separate reports giving assurance. These
reports will include a corporate governance statement (Chapter 11), a report
of the audit committee, and the report of the independent external auditor
(Chapter 10). Other governance committees, such as a nominating committee
to appoint directors, may also make reports.
The term non-financial reporting has gained common usage because there
is a recognition that when resources are provided to an entity, the activity
and accountability of management extend well beyond financial matters. In
particular, corporate social responsibility is seen as an essential aspect of the
accountability of an entity in contributing to long-term sustainability of the
planet (Chapter 13). Investors refer to information about environmental, social
and governance activities of an entity when making decisions to commit
further resources. Corporate reporting is seen as the combination of financial
reporting and non-financial reporting.
Accounting regulations are set within national law or the law of a wide
jurisdiction such as the EU (Chapter 7). The regulations may be accompanied
by official guidance. IFRS Standards, as a set of accounting standards, may
be applied through the legal process of a country or wider jurisdiction that
adopts them (Chapter 6). The description de jure is used to describe accounting
regulation set out within a legal or regulatory process. Accounting regulations
and guidance may apply to financial reporting or to non-financial reporting.
A reporting entity may indicate that it has voluntarily applied a framework
of guidance in its overall approach to corporate reporting. Such guidance is
typically provided by groups or organisations seeking to encourage greater
transparency and comparability. The Global Reporting Initiative (GRI)
is a framework that will be encountered in entities across many countries
(Chapter 13). There is a growing number of other frameworks relating mainly
to non-financial reporting. Within such a framework there may be principles,
standards, guidelines and recommendations.
Accounting practice is observed in the financial statements and non-financial
reports. The description de facto is used to describe observed practice. It may
be the case that while regulation prescribes options for practice, there is a
dominant preference in a jurisdiction for one practice over another. The
presence of a dominant practice may affect comparability across jurisdictions
because although regulations in two or more countries may introduce similar
requirements, companies’ practices may differ, and hence we may observe de
jure harmonisation (similarity in the rules) but this may not be observed de
facto (dissimilarity in the practice).

1.3 Our approach in this book

We provide in Part I a framework which defines the elements of international

corporate reporting (Chapter 1) and discusses the institutional and cultural
influences (Chapters 2 and 3) that shape global developments as well as those
1 : G lobal corporate reporting 11

that retain or develop diversity. Chapters 4 and 5 explain in more detail

research methods that are particularly useful in making comparative studies
of international corporate reporting regulations and practice. This framework
will be helpful to students planning dissertations or projects, in identifying a
research question and a research method to apply. Examples of developments
in academic research that examine comparability and diversity are discussed
in these and subsequent chapters, enabling students to undertake further
comparative studies in topical areas.7
In Part II we describe the global reach of international standards,
spearheaded by the development and application of international financial
reporting standards (Chapters 6 and 7) but subsequently expanded by broader
reporting initiatives (Chapters 8 and 9) such as the work of the International
Integrated Reporting Council.
We explain in Part III how assurance of corporate reporting is achieved
through auditing (Chapter 10) and corporate governance (Chapter 11). In
both areas there are global initiatives but also strong institutional and cultural
pressures in some countries and jurisdictions, to recognise distinctive ways of
doing business.
There have been many significant developments that have taken place
where narrative reporting strongly complements the financial statements
and related technical notes. We explain in Part IV how the narrative reports
may be the ‘front end’ of a single corporate report but increasingly they are
separate documents available through the corporate website. Narrative reports
focused on financial issues have been developed for some time (as explained in
Chapter 12) but financial markets now demand non-financial reporting with
a focus on corporate social responsibility and sustainability, where the Global
Reporting Initiative took an early lead but many other organisations have
followed (Chapter 13).
We provide a more technical discussion in Part V of aspects of group
accounting (Chapter 14), current issues in accounting (Chapter 15) and
corporate tax reporting (Chapter 16), all written in a way that seeks to help
the reader interpret the information provided in the financial statements and
notes on accounting policies or taxation effects.
We finish in Part VI by focusing on three major economies, namely the US
(Chapter 17), China (Chapter 18) and Japan (Chapter 19), where there have
been developments that recognise global influences on corporate reporting but
there are also strong forces for continued national diversity.8

1.4 The language we use

We are providing a series of chapters that offer an approach to comparative

studies across countries and jurisdictions, but we are writing this textbook
entirely in English. We are aware that using only one language to report on
institutions and cultures across the world sets a challenge that can never be
entirely overcome. In this section we explain how we try to reflect some
understanding of accounting systems, and the related institutions and cultures,
based on explanation and interpretation from those who have the first-hand
knowledge.
12 I nstitutions , culture and research methods

We note the observation of Evans (2018: 1844) that ‘language translation is

not a simple technical, but a socio-cultural, subjective and ideological process’.
Evans comments that the issues surrounding translation are often neglected by
researchers because of the deceptive argument of ‘equivalence’. She explains
that this refers to the assumption that the transfer of meaning and concepts
between language and culture is a simple technical process of exchanging
terms that are equivalent. Evans (2018: 1853–1854) observes that the focus of
academic institutions on research quality has increasingly become associated
with publications in the English language, particularly in North American
academic journals. One consequence is that where qualitative data analysis
is conducted in a language other than English, the researchers have to make
choices that are rarely discussed in the published paper. From our experience,
such issues become more evident and challenging for students when they
write dissertations or theses, and we encourage them to discuss the translation
challenges as part of their research reports.
The actions we take in subsequent chapters include the following:

• For authoritative guidance on technical matters, such as that provided by

government departments, professional bodies and stock market regulators,
we refer to website addresses in English, but from those websites there will
be directions to locations in the authoritative language of the country or
jurisdiction.
• We refer to documents issued by the EU in English, using the reference
numbers of the documents. The EU website reports in all official languages
of member states, so that the reader who wishes to read a document other
than in English may locate it in the desired language using the document’s
reference number.
• We encourage readers to use the website www.iasplus.com, maintained by
Deloitte, where there are links to further dedicated sites in the German,
Spanish, Japanese, Korean and Chinese languages.
• We select research papers that include authors whose first language and
first-hand knowledge reflects an understanding of the country concerned,
often working together with co-authors to preserve that first-hand
knowledge in translation to English. We are aware that some researchers
who do not have access to the relevant language may limit their sample of
accounting information to that published in English. Where we refer to
such work, we note the potential limitation of the sample.

1.5 Establishing global authority in corporate reporting

We explained in Section 1.1 that the authority of the IASB was established
initially in the requirements of stock exchanges, through the support of
IOSCO. Subsequently IFRS Standards have been adopted directly by some
jurisdictions. In others, the IFRS Standards have been endorsed for application
following a process of scrutiny within the jurisdiction. Elsewhere the IFRS
Standards have provided a basis for setting national standards under a national
regulator. In all cases the authority for use, and powers of enforcement, come
from a source other than the IASB itself. The establishment of IFRS Standards
1 : G lobal corporate reporting 13

has developed over a long time period, looking back to the establishment of
the IASC in 1973 where it was created by professional accountancy bodies
working together. The transition to IASB in 2000 substituted a different
structure of independent trustees appointing a board of independent standard
setters. The continued authority rests on the quality of the trustees and board
members, and their procedures for transparency and rigour in setting standards.
Subsequently, as outlined in Section 1.1, many other global initiatives
in corporate reporting have emerged, extending to auditing, corporate
governance, reporting management strategy and reporting on CSR. The
initiatives on auditing emerged from the work of the accountancy professional
bodies, initially through the International Federation of Accountants (IFAC)
and then through IFAC establishing the independent International Auditing
and Assurance Board (IAASB). The resulting International Standards on
Auditing (ISAs) are gaining global acceptance but rely on a source other than
the IAASB itself for the authority to use ISAs, and powers to enforce their
application. As more jurisdictions adopt ISAs or else adapt them for national
use, we see the support for ISAs developing gradually but along lines that
reflect the acceptance of IFRS Standards.
Accounting and auditing standards have both developed from initiatives
set in place by the accountancy professional bodies. For corporate governance
and strategic management reports, initiatives have come from a wide range of
interest groups where a common concern has been identified internationally.
Early initiatives in corporate governance codes may be attributed to particular
countries, but the work of the Organisation for Economic Co-operation
and Development (OECD) has given governmental support to principles of
corporate governance. Strategic management reports have been incorporated
within legislation such as that of the EU, having developed as voluntary
initiatives in some member states.Voluntary activity and separate initiatives
are often the starting point for a concept and practice that eventually takes on
wider international acceptance.
Probably the most interesting development in global initiatives for
corporate reporting is seen in CSR reporting. The groups of organisations that
have come together to promote a specific cause are many and varied. We take
as an example the well-established GRI, which was founded in 1997 in the
US. The website tells us that its roots lie in two US non-profit organisations,
the Coalition for Environmentally Responsible Economies (CERES) and the
Tellus Institute. The United Nations Environment Programme (UNEP) was
also involved in the establishment of the GRI. By 2018, the GRI informs us9
that it has global strategic partnerships with the Organisation for Economic
Co-operation and Development, the UN Environment Programme and the
UN Global Compact. Its framework enjoys synergies with the guidance of
the International Finance Corporation, the International Organization for
Standardization’s ISO 26000, the UN Conference on Trade and Development,
and the Earth Charter Initiative. Studying the history of the GRI shows that
a group which seeks to establish global influence needs to have a persuasive
message and to establish strong supportive networks. During the years that
followed the establishment of the GRI, many other global initiatives have
emerged and have gained support for proposals relating to the structure of
corporate reports and the nature of narrative reporting. Researchers have
14 I nstitutions , culture and research methods

commented that although globalisation is a complex and ill-defined process,

it is grounded in specific organisations using well-defined accounting
technologies10 These organisations and their initiatives are discussed in
Chapters 8, 12 and 13.

1.6 Challenging globalisation

We outlined in Section 1.1 the trend towards global standards for corporate
reporting. These include accounting standards, auditing standards, corporate
governance standards, management reporting standards and CSR standards. We
discuss here the possible disadvantages of global standards in any of these areas
of corporate reporting.
While many writers wholeheartedly support the introduction of global
standards, there are others who argue that the disadvantages outweigh
the advantages either in all cases or for at least some countries and some
companies. There are several reasons why sceptics are dubious about the
advantages of global initiatives. If the initiatives are to be successful, they must
reduce diversity, so that some existing flexibility will no longer be permitted.
Global standards, in particular, can only be enforced if national governments
and regulators agree to them. This means that there must be a reasonable
level of support for such proposed standards. The likelihood of any particular
initiative being acceptable is not simply dependent upon its theoretical
acceptability or the extent to which it meets the conceptual framework but
also on its international acceptability to companies, governments, accountants
and users. This is likely to result in a set of ‘one size fits all’ regulation with
local differences or characteristics being ignored. Powerful preparers of
corporate reports may exercise influence on the political system to accept or
reject a specific regulation.11 A country or company with unique needs or
characteristics may be forced to accept what is suitable for the majority and
will no longer be able to adopt a different method of corporate reporting
more suited to its own circumstances.
The initiatives that lead to developments in global corporate reporting
will typically seek to develop a set of standards that will gain widespread
acceptance and might eventually lead to adoption within the law of countries
or jurisdictions. This discussion leads to the following possible disadvantages or
limitations of global standards:

• For national companies:

• they have fewer opportunities to influence an international standard
setter than a domestic one;
• the company’s business and economic circumstances may not be
faithfully represented by the prescribed expectations of the global
standard; and
• they may be faced with high costs of implementation with few or no
commensurate benefits.
• For investors:
While the use of global standards may appear intuitively appealing for
investors, they may not understand the basis on which the standards
1 : G lobal corporate reporting 15

have been written, particularly where there is a strong focus on serving

the needs of developed capital markets. This is likely to be a particular
problem for smaller investors who lack the expertise and skills of the
professional investors, so placing them at an even greater disadvantage.
Using global standards may give an appearance of comparability but hide
real differences in commercial activity.
• For national governments:
The attraction of saving costs may be outweighed by the loss of control
over the nature and content of standards. Also, the government still has
the task of deciding whether to enforce compliance with the standards.
Limitations for national governments are:
• there is no reason to believe that ‘one system fits all’;
• harmonising on full disclosure may be detrimental to emerging
economies by putting them at a competitive disadvantage; and
• emerging economies may not be able to influence global standards as
much as developed countries.
To a large extent, the argument for or against global standards is actually
an argument about globalisation premised upon the assumption that the
most important, if not the only important, users of corporate reporting
information are international capital market participants. If purely
national companies dominate an economy, if the economy has few
international investors, or if the national corporate reporting system is
designed with a wide concept of accountability in mind to serve the
needs of other local user groups, then many of the supposed advantages
of global standards are unlikely to materialise.12

Ball (2006) listed many features of the world as they affect accounting
standards because they look more local or country-specific than global.
Although he was referring specifically to accounting standards, the same
features are relevant to the wider accounting system (as defined in Exhibit 1.3)
and to a discussion of corporate reporting more widely, namely:

• extent and nature of government involvement in the economy;

• politics of government involvement in financial reporting practice (e.g.
political influence of managers, corporations, labour unions, banks;
• legal systems (e.g. common versus code law; shareholder litigation rules);
• securities regulation and regulatory bodies;
• depth of financial markets;
• financial market structure (e.g. closeness of relationship between banks and
client companies);
• the role of the press, financial analysts and rating agencies;
• size of the corporate sector;
• structure of corporate governance (e.g. relative roles of labour, management
and capital);
• extent of private versus public ownership of corporations;
• extent of family-controlled businesses;
• extent of corporate membership in related-company groups (e.g. Japanese
keiretsu or Korean chaebol);
16 I nstitutions , culture and research methods

• extent of financial intermediation;

• the role of small shareholders vs institutions and corporate insiders;
• the use of financial statement information, including earnings, in
management compensation; and
• the status, independence, timing and compensation of auditors.

For many companies and users who are not involved in international
transactions, there may be few, if any, benefits of global standards. However,
the advantages or disadvantages of such standards cannot be considered in
isolation from considering what the standards actually require. If a global
standard setter manages to introduce a set of standards that meet the needs of
the local economic-political environment, then they may bring benefits to all
preparers and users even if they are not involved in any international activities.
If, however, it sets standards that are less appropriate or useful than the existing
domestic standards, then they will bring few advantages even to companies or
investors involved in international investment activities.

1.7 Summary and key points

Corporate reporting comprises accounting and assurance. Accounting is based

on accounting systems which may apply across countries or jurisdictions. An
accounting system comprises accounting regulations, standards and guidance,
and accounting practice. These elements of an accounting system create the
basis for entities to carry out financial and non-financial reporting within the
corporate report. Assurance is also provided in the corporate report through
audit reporting and through information about corporate governance.
Key points from the chapter:

• There are continuing interesting trends in global corporate reporting, with

particular emphasis on developing narrative reporting that covers both
financial and non-financial issues.
• The use of English as the language of teaching and research provides a
common basis for communication, but where English is a second language
there may be a need to consider the nature and context of the original
language used. Translation must preserve the underlying culture and
meaning, rather than being regarded as seeking only technical equivalents
of specific words.
• It takes many years for a new initiative in global corporate reporting to
become an accepted and established method. Support of stakeholder groups
must be established, and eventually some initiatives become incorporated
in the law of a country or jurisdiction. New initiatives continue to emerge
and we may observe their development currently.
• Some will argue that the disadvantages of globalisation outweigh the
benefits, especially where global initiatives are adopted within a country
and affect organisations within that country that have only national
expectations to consider. Commentators have identified disadvantages or
limitations of global standards that must be weighed against the advantages
claimed.
1 : G lobal corporate reporting 17

Questions

The following discussion questions are designed as a basis for tutorial discussion to
help you relate your understanding to the learning outcomes specified at the start
of this chapter. Each question focuses on one of the main sections of the chapter.
The endnotes and list of references will help you find more material to expand on
the outlines provided in the chapter.

1.1 The trends in global corporate reporting outlined in Section 1.1 refer to
corporate reporting, comprising a wide range of developments in accounting,
corporate governance and auditing. What factors drive the trends towards
globalisation in corporate reporting?
1.2 What are the main elements of an accounting system within the broader field
of corporate reporting?
1.3 What are the benefits and limitations of the dominance of the English
language in studying and researching global corporate reporting?
1.4 What are the approaches used by interest groups and organisations seeking
to establish global acceptance of their proposals for standards or guidelines
relating to corporate reporting?
1.5 What challenges are made to the idea of harmonising or standardising global
corporate reporting?

Notes

1 www.iosco.org/news/pdf/IOSCONEWS26.pdf. See also Chapter 8

Section 8.3.2.
2 The ‘stable platform’ involved issuing, by 31 March 2004, all of the new
and revised standards that would be required for companies adopting
IFRS Standards in 2005, with no further changes until after 2005. www.
iasplus.com/en/news/2003/September/news1119.
3 www.iasplus.com/en/news/2006/July/news2737
4 Weetman (2006) comments on how many research papers on apparently
unrelated themes, in business studies, accounting and finance, provide
evidence and ideas on the interactions and contrasts between local and
global issues.
5 The phrase ‘those charged with governance’ is used as a broader term
which includes management but recognises wider forms of governance of
an entity.
6 IAS 1 Presentation of Financial Statements para. 10.
7 We focus on the identification of research topics and the methods of
investigation. Research papers also draw on theory. We refer readers
to sources such as Deegan and Unerman (2011) or Scott and O’Brien
(2019) for further guidance on theories.
8 We address developments in emerging economies through invited
contributions in a companion volume, Weetman and Tsalavoutas (2020).
9 www.globalreporting.org/information/about-gri/alliances-and-synergies/
Pages/default.aspx
18 I nstitutions , culture and research methods

10 Graham and Neu (2003).

11 Zeff (2007).
12 Lehman (2005).

References

Ball, R. (2006). International financial reporting standards (IFRS): Pros

and cons for investors. Accounting and Business Research, Special Issue,
International Accounting Policy Forum, Supp.1: 5–27.
Deegan, C. and Unerman, J. (2011). Financial accounting theory: European edition.
McGraw-Hill.
Evans, L. (2004). Language, translation and the problem of international
accounting communication. Accounting, Auditing and Accountability Journal,
17(2): 210–248.
Evans, L. (2018). Language, translation and accounting: Towards a critical
research agenda. Accounting, Auditing and Accountability Journal, 31(7):
1844–1873.
Graham, C. and Neu, D. (2003). Accounting for globalization. Accounting
Forum, 27: 449–471.
Lehman, G. (2005). A critical perspective on the harmonization of accounting
in a globalizing world. Critical Perspectives in Accounting, 16: 975–992.
Scott, W.R. and O’Brien, P.C. (2019). Financial accounting theory (8th ed.)
Pearson Education Canada.
Tsalavoutas, I., André, P. and Evans, L. (2012). The transition to IFRS and the
value relevance of financial statements in Greece. British Accounting Review,
44(4): 262–277.
Weetman, P. (2006). Discovering the ‘international’ in accounting and finance.
British Accounting Review, 38(4): 351–370.
Weetman, P. and Tsalavoutas, I. (eds.) (2020). Routledge companion to accounting in
emerging economies. London: Routledge.
Zeff, S.A. (2007). Some obstacles to global financial reporting comparability
and convergence at a high level of quality. British Accounting Review, 39(4):
290–302.
 CHAPTER 2

Institutional and
external influences
Contents

Learning outcomes 19
2.1 Introduction 20
2.2 Factors influencing the development of corporate reporting 21
2.3 The political and economic system 22
2.3.1 Types of system 22
2.3.2 The regulation of accounting 23
2.3.3 Types of business organisation 23
2.4 The legal system 24
2.4.1 Types of legal system 24
2.4.2 Accounting and code law legal systems 25
2.4.3 Accounting and common law legal systems 25
2.5 The taxation system 26
2.5.1 Independent tax and financial reporting regulations 26
2.5.2 The use of financial reporting rules by the tax authorities 26
2.5.3 The use of tax rules for financial reporting 27
2.6 The corporate financing system 27
2.6.1 Corporate financing patterns 27
2.6.2 Equity ownership patterns 28
2.6.3 Stock market structure 29
2.7 The accounting and auditing profession 30
2.8 Religious institutions 31
2.9 Other influences 33
2.9.1 Accidents of history 33
2.9.2 Exporting/imposition of accounting 33
2.9.3 Importing accounting 34
2.10 Summary and key points 34
Questions35
References37

Learning outcomes
After reading this chapter you should be able to:
• Understand how various aspects of a country’s political and economic
system have influenced its corporate reporting generally and its accounting
system in particular.
20 I nstitutions , culture and research methods

• Distinguish between common and code law systems and describe how the
legal system typically influences the system of accounting regulation.
• Describe the ways in which the tax system can influence accounting rules
and practices.
• Identify possible differences in the financing of companies internationally
and describe how these differences may help to explain differences in
accounting rules and practices.
• Understand how the way in which the accounting profession is organised
can influence accounting rules and practices.
• Discuss the influence of religious beliefs on accounting practices.
• Explain how a country might import or export accounting rules and practices.
• Evaluate research which has investigated the effect of institutional structures
on corporate reporting.

2.1 Introduction

In Chapter 1 we define corporate reporting as comprising accounting

systems, auditing and corporate governance (see Chapter 1 Exhibit 1.3). Many
factors have influenced the development of corporate reporting and there
are many explanations of why countries have developed different accounting
systems and different approaches to auditing and corporate governance. The
explanations may be grouped broadly as institutional and cultural factors.
This chapter explores some of the ways in which a society can organise itself
institutionally and how this has affected the way in which corporate reporting
has developed. Chapter 3 will explore what is meant by ‘culture’, and considers
how the culture of a society or a country can influence its corporate reporting.
The chapter introduces a general model that explains the types of
institutional factors that may influence corporate reporting in general
and accounting systems in particular. It then considers in more detail the
institutional factors and external factors, namely:

• the political and economic system;

• the legal system;
• the taxation system;
• the corporate financing system;
• the accounting profession;
• religious beliefs; and
• external influences.

Research into the influences of institutional systems on accounting principles

and practices has historically examined the position before the International
Accounting Standards Board (IASB) began to wield a significant influence on
practices internationally. More recent research has investigated the institutional
factors that may continue to influence choices that may inhibit complete
harmonisation under IFRS.1 Researchers continue to explore diversity
in areas of accounting and assurance not regulated by the IASB where
national influences remain stronger.2 We explore these avenues of research
in subsequent chapters. The discussion in this chapter is intended to help
Exploring the Variety of Random
Documents with Different Content
 CHAPTER XIX.
FAIRS OF FRANCE.
It is to France that we must look if we would fully comprehend alike
the splendour and importance of the fairs of Europe. Even here, as
elsewhere, they are now to be regarded as things of the past; but of
a past that is full of instruction.
In the eighth and ninth centuries hardly any trade was known in
France, other than that carried on in markets and fairs; these were,
therefore, almost the only places for providing oneself with
necessaries. Artificers and dealers lived apart, dispersed in the
country; the towns were chiefly inhabited by the clergy and some
handicraftsmen, with few or no monks or nuns, the far greater part
of the monasteries being either in the open country or the
neighbourhood of the cities. The nobility lived on their estates, or
attended the Court. The Pote people were so far under their Lord’s
power as not to quit the place of their birth without his leave; the
villain was annexed to the estate, and the slave to the master’s
house or land. Such a dispersion was little promotive of trade, which
loves large and policed communities; and it was to remedy this
inconvenience that its Kings established so many fairs. Vide “Extracts
translated from New Hist. of France,” 1769, i. 65.
There seem to have been three grades of fairs.—1. Free fairs, to
which all might come without restriction of toll or other limitation. 2.
Fairs having their franchises restricted by some local right or usage.
3. Common fairs, without any special franchises whatever. I shall
mainly confine myself to a notice of those falling under the first of
these definitions—free fairs.

Champagne and Brie.

 I may speak of the fairs of these provinces collectively. They were
not only amongst the most celebrated of France or of Europe, but
possess the charm of great antiquity. They are believed to have been
founded by the earls of those provinces. Sidonius Apollinaris alludes
to them, in the fifth century. They were held in seventeen of the
chief cities—some of which had as many as six yearly, others four,
none less than two.
I have already given (in the first chapter in this book) some
account of the commercial importance of these fairs in Europe, and
need not re-traverse that ground. They have a great interest from an
English point of view for reasons which will presently appear.
These districts were not indeed provinces of France at the early
date above named. They only became so in 1284, and so far from
their fairs gaining any additional lustre by the annexation, the very
reverse appears to have been the fact. The domination of the crown
of France spread awe instead of confidence into the minds of their
wealthy traders!
The truth I suspect to be that charges and restrictions previously
unknown were imposed. This view indeed finds direct support in the
fact that in 1349 Philip de Valois granted letters patent confirming
ancient franchises, and suppressing the new impositions. By means
of this document we learn precisely what the ancient privileges
were. The patent consisted of thirty-six articles, but the more
material may be grouped under five heads, viz.:
1. The Franchises.—All foreign dealers their factors and agents to
have free liberty under the Royal protection, to resort to these fairs
with their goods, provided however that these same goods were
designed to be sold or exchanged there; or failing this were to be
removed within the appointed time for the duration of the fair. They
were exempted from all dues, impositions, &c., according to the
good and ancient usages, customs, and liberties of the said fairs. No
favours or letters of respite might be granted against the said
dealers, or the customs and liberties of the said fairs—all such, if
obtained, being null. No dealers resorting to or returning from,
should be stopped or molested, without special warrant from the
wardens of the conservation, and for obligations made truly and
really in the fair.
2. Wardens of the Privileges.—These were judges appointed
during the fair, to see that the franchises were preserved, and to
take cognizance of contests that might arise between traders there.
Every fair was to have two wardens, one chancellor to keep the seal,
two lieutenants, forty notaries, and 100 serjeants. The wardens and
chancellors were sworn in the Chamber of Accounts, Paris, where
they were yearly to make their report of the state of the fairs. No
judgment might be given during the fair but by the two wardens, or
when one was unavoidably absent, by one warden and the
chancellor.
3. How goods were to be brought within the franchise.—The
drapers and traders of the seventeen cities of Champagne and Brie
frequenting the fairs—that is to say those of the cities in which one
of these seventeen fairs was held—might not sell their cloths or
other stuffs, wholesale or retail, within or without the kingdom,
unless first sent to one of the fairs and exposed for sale from the
first day appointed for the sale of cloth until the sixth following, on
pain of forfeiture; they being, however, at liberty to dispose of them
as they pleased, if not sold in that time.
Farmers, curriers, &c., must bring their leather to the fair, and
expose it all together from the first of the three days, without
reserving any for the last days, or selling in any other place than
that designed for the sale of leather.
Horse-dealers, both subjects and foreigners, must have their
stables in the said fairs from the third day of the cloths (i.e. fixed for
the sale of cloth) until the fair ended.
In like manner all other wares brought into the fair were to remain
on sale, some for six days, others for three days only, according to
their nature and quality.
 4. Inspections.—These were of two kinds, one by the wardens
conservators, and the other by examiners chosen out of the trading
companies frequenting the fair. The wardens’ inspection was at the
opening of every fair, to see that the dealers had all suitable
convenience and security—the inspectors being properly qualified
judges of the character of the goods brought, with authority to stop
and seize all that were of inferior quality; but this not without appeal
to six, five, or four persons experienced in the particular trade.
5. Payments, Bonds, and Exchanges.—All tradesmen, alike French
and foreigners, might agree in their contracts for payment of goods
sold in the fair—to be paid in gold and silver current at the time of
making the contract, notwithstanding any ordinance concerning
money to the contrary. Interest for loans, and goods sold on credit
at fairs, might not exceed fifteen per cent. The interest might not be
added to the principal in renewing bonds made at fairs. Nor might
bonds made at any other time run in the style of those used at fairs,
as if made there.
All letters, acts, contracts, &c., relating to fairs, to be null unless
under the authenticated seal of the fairs. None unless he had actual
residence in fairs might use the seal or other obligations, or enjoy
the privileges thereof.
The re-establishment of these privileges—many of which were
obviously made in the interest of merchants attending to buy—had
the effect of restoring the fairs of these provinces to their former
greatness. Again multitudes of traders came from Germany, Italy
(particularly from Florence), Lucca, Venice, and Genoa, with gold,
silver, and silk stuffs, spices and other goods of their country, or of
the Levant, taking in exchange cloths, leather and other
commodities, not only the produce of the provinces, but brought
from other parts of France.
I speak of the fair of Troyes separately hereafter, on account of
one of its distinguishing features.
 Mr. Morley has pointed out that before the establishment of free
fairs in France, the rights of salutaticum, pontaticum, repaticum, and
portulaticum, absorbed one half of a foreign merchant’s goods upon
their first arrival and debarkation. Afterwards traders came exempt
not only from imperial taxation, but from many of the ordinary risks
of travel.
One great element of interest in these fairs centres in the
circumstance of the following correspondence between the Wardens
of the fair and the Lord Mayor of London concerning dealings in
these fairs in the thirteenth century. They have been carefully
preserved amongst the records of the City for six centuries—and
now for the first time gain the glory of printer’s ink. They reveal a
feature in the comity of nations; and present a proof of the
cosmopolitan interests of commerce which can scarcely be excelled.
Hence I propose to give them entire:
1. Letter directed to the Mayor by the Keepers of the Fairs of
Champagne and Brie, dated September 1299.

To the venerable man, the provident, wise and discreet

Warden of London, or to his vicegerent, Peter de Fremeville,
knight, and Robert de Champagne (de Campaniis), keepers of
the fairs of Champagne and Brie for our most illustrious Lord
the King of the French, increase of all good with greeting and
sincere affection. Whereas heretofore, by our letters patent
sealed with the seal of the fairs of Champagne, we have
entreated you to compel, or cause to be compelled, the
burgess Fauberti, a citizen of Florence and horse-dealer
(mercatorem equorum), together with Guido Fauberti, Nutus
(or Nuto) Fauberti, brothers of the said burgess, Master
Gerald de Galaiòn physician, [and] James son of the said
Nutus, associates of the said burgess, by the sale of their
goods and the seizure of their bodies, sending them back to
us, to yield and pay to Pucheus de Pré (de Prato), formerly
horse-dealer in the said fairs, Martin de Burgo novo, brother
of John de Burgo now deceased formerly horse-dealer, and
John de Burgo novo, nephew of the said John deceased and
of Martin aforesaid, or to the bearer of our said letters for
them, one thousand six hundred petits livres Tournois with
sufficient damages and expenses; and to satisfy us
concerning the said King’s amends for default of the fairs. In
which sum of money they are held effectually bounden, and
every of them in the whole, for the body of the fairs of Bani
(Bari) super Albam from the year of Our Lord 1292, as well by
reason and because of certain pledges made and committed
in and upon the body of the said fairs, as by reason and
because of the restitution of more sureties and more costs
and damages, which by default of the said burgess and his
associates before mentioned in and upon the body of the said
fairs they had and were said to have incurred: as in certain
open letters of definitive sentence sealed with the seal of the
said fairs is said to be contained. Upon which things Tolnetus
[elsewhere Nicholas] called Concesse, our sworn servant in
the said fairs, by word of mouth related to us that he in the
year of Our Lord 1293 presented to you our aforesaid letters
(as he says), which deprecatory letters of ours directed to you
if forsooth you received, yet you willed not to demand due
execution of the same, or to write back any answer to us,
although at the end it was duly contained that what you
should do therein, you would will and deign by your letters to
write back, and although in presence of many trustworthy
persons you were so requested by our said servant; on the
ground that war was begun and raised between the most
excellent princes, the King of France and King of England: as
our said sworn servant on oath has related all these things to
be true, whereat we most greatly marvel, if it is so and we
hold ourselves not contemned, since this is to the no mean
damage and grievance of the said creditors, and prejudice
and contempt of the government of the said fairs committed
unto us, because on account of the war aforesaid you were
by no means bound to keep back our said letters deprecatory
demanding due execution. Wherefore as much as we can
with diligence on behalf of our most excellent lord, John by
the grace of God, King of France and Navarre, Lord of
Champagne and Brie, and on our part, by the tenor of these
presents, we move your providence to be entreated, that you
do cause all the goods of the aforesaid burgess Fauberti and
his associates before named and of the said company to be
solemnly proclaimed for sale, and to be sold and divided
without delay to the uses and customs of fairs, or so much of
them that out of the price of the sale the said creditors (or,
for them, the bearer of these presents) as to the aforesaid
sum of money with sufficient damages and expenses, and
we, as to the amends of our said lord the King, be wholly
satisfied; and that the body of the said burgess Fauberti
together with the bodies of his associates aforenamed—if
they can be found in your jurisdiction, and if the sale of goods
does not suffice for the premises—you do send back to us to
the fairs in sure and faithful custody to pay among them the
charges of the creditors, and to clear themselves before us in
this matter as to the uses and customs beforesaid. If,
however, you wish to put forward any thing contrary to the
report of our said servant, and believe your own interests to
be concerned, be present in person before us, or, for yourself,
send at a fitting day which the bearer of these presents shall
cause to be named to you, to say what shall seem to you
expedient. Otherwise, we shall then hold the said report to be
fast and firm, you doing thereupon, on account of the
reverence and honour due to our aforesaid lord the King and
the intervention of our prayers, because we are bounden to
you and yours in all manner of favours deserved, such and so
much as you would wish us to do for you in the like or a
greater case. What you shall do herein, have a care to signify
to us by the bearer of these presents in your letters patent
together with the present letters demanding execution sent
back, notwithstanding that they shall not be presented to you
by the servant of the fairs. Given in the year of Our Lord one
 thousand two hundred and ninety-nine in the month of
September.
J. de sancto Nabore.

2. Letter sent to the Keepers of the Fairs of Champagne and Brie,

dated March 19, 1299-1300.

To the noble men and discreet lords Peter de Fremeville

knight and Robert de Champagne keepers of the fairs of
Champagne and Brie for the lord the King of France, Elias
Russel, Mayor, and the Citizens of London, Greeting and
continual increase of sincere affection. Whereas you lately
wrote unto us that we should compel the burgess Fauberti
&c. [named as before] as well by sale of their goods as by
seizure of their bodies and also sending them to you, to
render to Pucheus de Pré formerly horse-dealer, Martin de
Burgo novo and other creditors in your letters comprised, or
to the bearer of your said letters, 1,600 petit livres Tournois
together with damages and expenses, and also the amends
of the Lord the King for default of fairs; in which sum of
money the aforesaid dealers (mercatores), and every of them
in the whole, are bound by their letters made in the fairs of
Bari super Albam, by reason of divers contracts between
them before had from the year of Our Lord 1292, as in your
letters thereupon to us directed more fully is contained: We
willing, so far as the laws and customs of England permit, by
mutual interchange to comply with your prayers, have caused
to come before us, in the presence of John de Flekers your
servant and bearer of the presents, the aforesaid burgess and
Nutus, dealers, to answer to your said servant concerning the
said debt according to the form of your letters, which said
dealers asserted that they are quit of all the aforesaid,
because of them all they sufficiently satisfied the said
creditors, and therein proffered a letter of Gencian de Paris,
baker (panetarii) of the King of France, and Robert de
 Champagne, keepers of the fairs of Champagne and Brie
sealed with the seal of the fairs of Champagne, in which it is
contained that the said burgess, for himself, his brothers, and
associates, in the fairs of Bari super Albam in the year of Our
Lord 1293, appeared in person before the said keepers, and
spoke with the said Pucheus and compounded with him under
such form that the said Pucheus held himself as paid by the
said burgess, his brothers and associates abovesaid, by
reason of the said composition, as the said Pucheus before
the said keepers acknowledged and wholly assented to the
said composition for himself and his associates. And because
by the letters aforesaid it appeared that the said burgess and
his associates by the said composition are totally quit of the
debt aforesaid, we could not by your mandate lawfully compel
them to pay the said money. Given at London on Saturday
next before Mid-Lent in the year of Our Lord 1299.

3. Second letter [of the Keepers] of the Fairs of Champagne and

Brie for the burgess Fuberti to the Lord Mayor, dated May 1300.

To the provident men, the venerable and honorable Mayor

and Citizens of London, or their vicegerents, or one of them,
Peter de Fremville, knight, and Robert de Champagne,
keepers of the fairs of Champagne and Brie, continual
increase of sincere affection with greeting. Whereas we, by
our letters patent sealed with the seal of the said fairs, have
many times (pluries) prayed and requested you to compel
and cause to be compelled the burgess Fouberti, citizen of
Florence and horse-dealer by seizure of his body and goods,
and also by the sale of the goods of Guido Fouberti &c. [as
before], to satisfy Pucheus de Pré formerly in the said fairs
horse-dealer, Martin &c. [as before], on and of the sum (that
is to say) of 1060 [for 1600] petits livres Tournois with
moderate damages and costs, in which sum of money the
said burgess Fouberti together with his associates aforesaid is
held bound to the beforenamed Pucheus, Martin and John, as
debtor, concerning the body of the past fairs of Barri super
Albam in the year of Our Lord 1293, as well by reason and
because of certain pledges made and committed in and upon
the body of the abovesaid fairs, as by reason and because of
the restitution of more sureties and more costs and damages
which by default of the said burgess and his associates
beforementioned in and upon the body of the said fairs they
had and were said to have incurred, as in certain letters of
definitive sentence sealed with the seal of the fairs of
Champagne is said to be contained: upon which, first, you
would make no answer to us, or for our said letters
deprecatory demand any execution, as Nicholas called
Concesse our sworn servant, bearer of our said letters (as he
said), reported to us on oath by word of mouth; but upon the
tenor of our second letters which you caused to be detained
with you—as John de Flichers our sworn servant, bearer of
the same (as he says) related to us with his own mouth—
upon these things with certain closed letters you wrote back,
that you caused to come before you in presence of the said
John de Flichers the aforesaid burgess and Nutus, dealers,
according to the form of our letters to answer to our said
servant concerning the said debt. Which said dealers asserted
they were quit of all the abovesaid, because of all these they
duly satisfied the said creditors &c. [reciting what was said in
the last]. By the course of these presents we thus hereupon
notify to you that the said sum of money has not yet been in
any way satisfied, as Dignus de Pré, son and heir (as it is
said) of Pucheus deceased, has given us to understand. And
assuredly, moreover, as soon as the said burgess on account
of the things aforesaid appeared before you, and alleged the
things contained in your answer, you ought to have taken into
your hand his goods and those of his said associates, and to
have fixed a certain and fit day for him before you, as in our
letters abovesaid was contained; for the cognizance of what
relates to fairs belongs to no judge, but to us only by reason
 of the government of fairs committed unto us. Wherefore, on
the part of our lord the King of France and on our own part,
we again ask your providences to cause without delay so
much of the goods of the said burgess and his associates
aforesaid to be taken, sold, and divided to the uses and
customs of fairs that the aforesaid Dignus de Pré may be fully
satisfied of the whole sum of money aforesaid with damages
and expenses, and we, of the amends; and the body of the
said burgess, is the sale shall not suffice for the costs of the
said complainant, left on account of your default it behove us
to inhibit the land and fairs of Champagne and Brie to all your
subjects and their goods. What you shall do herein, have a
care to signify to us in your letters patent by the bearer of
these presents, sending back the present letters together with
our other letters aforesaid detained with you, as has been
said. Given in the year of Our Lord 1300 in the month of May.
J. de Sancto Nabore.

I have placed a passage in italics, as indicating the fact that the

merchants of London attended these fairs.
4. Letter from the Lord Mayor of London in answer directed to the
Keepers of the Fairs of Champagne [and Brie] dated 20 Aug. 1300.

To the discreet and honourable men, if it please their most

dear friends, the lords Peter de Fremville, knight, and Robert
de Champagne, Wardens of the fairs of Champagne and Brie
for the illustrious King of France, Elias Russel, Mayor of
London, and the Citizens of the same City, Greeting and
continual increase of sincere affection with health. Whereas
heretofore you wrote to us that we should compel the
burgess Fuberti, Citizen of Florence, horse-dealer &c. [naming
the others as before], as well by sale of their goods as by the
seizing of their bodies and sending them to you, to render to
Pucheus de Pré, formerly horse-dealer, Martin de Burgo novo,
and other creditors in your said letters comprised, or to the
bearer of the said letters, 1600 petits livres Tournois together
with damages and expenses, and also amends of the Lord the
King for default of the fairs; in which sum of money the said
burgess and his associates, by their letters made in your fairs
beforesaid, are bound by reasons of divers contracts between
them had belonging to the year of Our Lord 1293; as in your
letters thereupon to us directed more fully is contained: We,
as much as in us lies, and as the customs and rights of the
Realm of England permit us to do, willing to comply
altogether with your prayers and requests, have made to
come before us, in the presence of your servant the bearer of
the presents, the said burgess and Nutus whom we found in
our jurisdiction. Nevertheless we sequestered their goods in
the presence of your servant putting upon them concerning
the said debt, as is contained in your letters aforesaid. And
your letters being heard and understood, the said traders
(mercatores) asserted that they are not bound of right to
answer to your said letters, because in your letters secondly
to us directed (as you assert) it was contained that the said
burgess and his associates before you in your fairs in the year
of Our Lord 1292 bound themselves, upon which obligation
they proffered a certain letter of satisfaction of the said debt,
sealed with the seal of the fairs of Champagne and Brie. In
which said letter it was contained that the said burgess before
you compounded with the said Pucheus, to which composition
he the said Pucheus assented; and in these your letters now
to us directed it is contained that the said burgess and his
associates in the year of Our Lord 1293 bound themselves
before you in your fairs: at which writing we marvel.
Moreover, at the time in which your said letters were directed
unto us, our lord the illustrious King of England was in his war
of Scotland with whom at present we have not been able to
consult, nor are the said burgess and his associates of the
liberty of our City of London: on which account, without the
special mandate of our Lord the King of England we dared
not move a hand toward the seizing of their bodies, or send
the said burgess and others out of the Realm of England.
Therefore we request and earnestly entreat your lordships
that at present in this charge you will hold us excused from
the actions abovesaid, and deign to write to our Lord the
illustrious King of England upon the aforesaid debts and
requests; and those things which shall be commanded us for
the advantage of the said creditors, and for your good
pleasure, we will dispatch without delay, and to the utmost of
our power. Farewell in Him who is the salvation of all men.
Given at London on Saturday next after the feast of the
Assumption of the Blessed Virgin Mary in the year of Our Lord
1300.
 CHAPTER XX.
OTHER FAIRS OF FRANCE.
I have now to notice some of the other great fairs of France. And
here it has to be remarked that while the later sovereigns—certainly
down to Louis XV.—adopted the regulations already reviewed, for
their model in the government of fairs, yet that there were some
necessary deviations, according as time, place, and other
circumstances demanded. The chief of these deviations will be noted
in the following summary, wherein I review the provincial fairs first,
and afterwards those in and around Paris.
Postlethwayt, in his “Dictionary of Trade,” from which some of the
preceding and following details are drawn, remarks, not with entire
clearness: “Though it be not essential to these meetings of traders
to have comedians, rope-dancers, and the like, yet there are few
considerable ones without enough of them; and, perhaps, is what
greatly contributes to the trade of them—the nobility and country
gentry greatly flocking to them, more for their diversion than what
they buy there, which might be had, perhaps, better and cheaper at
home. It is well known how the nobility of Languedoc flock to the
fair of Beaucaire, and those of Normandy to that of Guibray; but it is
nothing in comparison to the assembly of German princes and
nobles at the three fairs of Leipzic, and the two of Frankfort-on-the-
Main.” He was writing in the first half of the last century. Things are
now much changed.
Beaucaire (in Languedoc).—An important town, whose
manufactures consist of silks, red wines, taffetas, olive oil, and
pottery. But its trade is chiefly due to its great fair, held annually
between 1st and 28th July, the site extending from the Rhône to the
base of the Castle Rock. This fair was established in 1217 by
Raymond VI., Count of Toulouse, and was for many ages attended
by merchants and manufacturers from all countries in Europe, and
even from Persia and Armenia. Arthur Young visited it in 1788, and
records (“Travels in France”) that the business transacted at it
reached 10 million livres—£439,000. So late as 1833 it drew
together 60,000 persons, and the amount of its transactions were
stated to be 150 millions of francs—£6,000,000! This would appear
to be an over-estimate.
I believe the fair now only lasts one week, namely from 22nd to
28th July inclusive. It is a rule that all bills must be presented on the
27th, and protested if necessary on 28th—last day of the fair. The
trade in linen and cloth is very large.
Besançon.—This ancient city, a great centre of warfare and of trade
from the days of the Cæsars, had once a fair of great celebrity. At a
later period it was chiefly notable for carrying on the business of
exchange. This business had been perfected at the fairs of Lyons,
from whence it passed here. On the first day of the fair the
merchants of a certain standing announced the terms on which they
were willing to exchange with different countries, and on the second
day an authoritative declaration was made of the fair terms of
exchange with any foreign country. For this purpose, with the
constant fluctuations in all actual coinage, it was necessary to have a
unit which should be common to all lands, and free from the
possibility of depreciation. Hence everything was reckoned by means
of an imaginary unit—scutus marcharum, or money of account: so
that the form which the business took was not that of buying bills,
but of exchanging these fictitious coins, made realizable in one town,
for quantities of actual coinage of another country, according to the
authoritatively declared rate, which took account of the difficulty of
transport, and of various risks. A scutus marcharum was worth in
Genoa 67⅓ soldi of the actual coinage of the place. The question to
be settled was what, at this time, shall be paid in Piacenza for a
scutus marcharum in Genoa? This was the fair rate of exchange, and
the announcement of it was intended to exclude the operations of
private speculators (in which it was not entirely successful), and to
secure a division of the advantage among each of the parties
transacting business. Vide Cunningham’s “English Industry and
Commerce,” 1882, p. 278.
Bordeaux.—This city has or had two fairs annually—one
commencing on the 1st March, the other on the 15th October; they
each continued fifteen days. The October fair was generally the
more considerable.
The chief commodities disposed of were wines and brandies, and
it was no unusual sight to see several hundreds of vessels beyond
the usual average number in the port, some of these being of
unusually large tonnage.
The fairs had the same privileges with those of Champagne,
Lyons, Paris, and Poictou. The consular judges performed the office
of conservators, with the same jurisdiction as those of Lyons.
Caen (Normandy).—This free fair was once very famous. It begins
the day after Low Sunday, and lasts fifteen days, of which the first
eight were designated the “great week,” the other portion the lesser,
because formerly the franchises lasted only the first eight; and
because the concourse of strangers was much greater during the
early week of the fair.
The merchants dealt in merchandise of all kind, but woollen
manufactures were the great speciality. The shops in which the
dealers expose their goods here are designated “Lodges.” A
considerable number of horses and of cattle were brought to it from
the provinces of Normandy. This fair was regarded as next in
importance to that of Guibray.
It seems that in 1433 there was an attempt to despoil this fair, by
an attack of 700 horsemen, of which I find the following brief
record:—“Whereupon they sent the Lord Ambrose de Lore, with vii.
c. horsemen, to robbe and spoyle the poore people, commynge to
the faier, on the daye of Sainct Michaell the Archangell, kepte in the
Suberbes of the toune of Caen.”—Hall, Hen. VI. ann. ii.
During the year several smaller and ordinary fairs are held for the
sale of horses, cattle, butter, and poultry.
 Dieppe.—This is a free fair of comparatively modern date, said to be
the last authorized in France, having been founded by letters patent
in 1696. It was first opened on 1st December that year. It continues
for fifteen days. All foreigners are at liberty freely to trade here, and
goods declared to be for the fair are not liable to seizure while the
fair lasts; nor were they liable to inspection by the wardens—a
relaxation of practice apparently not quite in the interest of the
buyers.
Its franchises and privileges are, that all goods brought into the
port of Dieppe during the fair, and there sold or bartered, are
exempt from one moiety of duties inwards and outwards. And
merchandise imported and not sold during the fair may be carried
out free of customs.
Guibray (Lower Normandy).—A fair of very considerable
importance, lasting from 10th to 25th August, was held here. Arthur
Young, of agricultural fame, describes in his “Travels in France”
(1788), a visit to it on 22nd August, and records as follows: “At this
fair of Guibray merchandise is sold, they say, to the amount of six
millions (£260,500) ... I found the quantity of English goods
considerable, hard and queen’s ware; cloth and cottons. A doz. of
common plain knives, 3 livres; and 4 livres for a French imitation,
but much worse.” It was a feature of this fair that the resident
gentry for long distances around came here to make their purchases.
Lyons.—It has been supposed that the ancient fairs of this city
were founded on a special privilege granted by the Roman
conquerors. They are four in number—the first is that of the
Epiphany, which always begins in January, the Monday after the
twelfth day; the second is Easter fair, beginning on St. Nisier’s day in
April; the third in August, which begins on St. Dominick’s day in that
month; and the fourth is the fair of All Saints, beginning on St.
Hubert’s day, in November. The situation of this city, at the
confluence of the Saône and the Rhône, render it unrivalled for the
facilities of water carriage through some of the richest parts of
France.
 These fairs were of the highest mercantile repute, and at a very
early period bills of exchange were brought into requisition in the
adjustment of the accounts for merchandise purchased there. It
seems also that bills resulting from commercial dealings in many
other parts of Europe were made payable at the Lyons fairs.
Fixed days for payment followed each fair. The ceremonies
attending these days were as follows: The chief magistrate came to
the lodge of the Exchange, accompanied by his registrar and six
syndics, viz., two French, two Italian, and two Swiss or Germans;
and there, after a short discourse to the assistants, recommending
probity in trade, and observance of the laws, customs, and usages of
the place, the laws, customs, and usages were read in extenso; and
the clerk drew up a process verbal of the opening of the “payment.”
The next day they met at the City-hall, and by plurality of voices
settle the course of exchange for all cities with which Lyons had any
commercial correspondence. This custom prevailed for some
centuries; and even when the strict regulations here described were
frequently departed from, the regulations were capable of being
enforced on appeal.
When bills were drawn to be paid at one of these appointed times
at Lyons, which had not then begun, the drawer said “pay this my
first of Exchange, &c., in the next Epiphany (or other) payment;” but
if the payment had already begun, the bill had to be drawn payable
“in this current or present payment of Epiphany” (or other term).
The bills so drawn were to be accepted in the first six days of the
payment they were made payable in; and the person on whom they
were drawn was not obliged to declare whether he would or not
accept until the sixth day. But after that day the bearer might protest
them for non-acceptance, though he might detain them during the
whole time of that “payment,” to see whether any one offered to
discharge them. The protest, however, was immediately forwarded
to the remitters; and if any one paid a bill in the time of the payment
before the sixth day (or that being a feast day, the day following) it
was at his own risk.
 The bearers of bills not satisfied by the last day of any “payment”
were to protest them on the third day after the payment finished,
otherwise they lost their right as against the drawers; but if this
were done in form, and in the time prescribed, the holder might
afterwards refuse payment from any one that offered it, and take his
reimbursement upon the drawer, alike for principal and charges. And
the said holders of bills were obliged to take their reimbursement on
the drawers or indorsers in a time limited, viz., for all bills drawn
from any part of France, in two months; those which were from
Italy, Switzerland, Germany, Holland, Flanders, and England, in
three months; and those which were drawn from Spain, Portugal,
Poland, Sweden, and Denmark, in six months, to be counted from
the date of the protest; or in default thereof they lost their rights
against the drawers and indorsers. See Besançon.
The general reader must pardon these details, which are of
commercial significance. It was customary at an early period to
make the bills drawn from Amsterdam and elsewhere on the
“payment” of Lyons, in “golden crowns of the sun;” but when this
specie became decried in France, the usage of exchange came to be
to draw for the payment of Lyons (as was practised in France
generally), viz., in crowns of sixty sous, equal to the present English
half-crown. These practices may be compared with the usages of
Nuremburg, Frankfort, and Leipzig fairs.
The franchises of the fairs of Lyons in the early half of the last
century had this special feature: that all goods intended for foreign
countries, sent out of this city during the fifteen days of either fair,
paid no customs outwards, provided the bales and parcels were
marked with the city arms, and had certificates of franchise properly
made out. To enjoy this privilege the merchandise had to be sent out
of the kingdom before the first day of the following fair, unless
special permission for delay had been obtained.
There is reason to believe that a considerable trade in books was
transacted at these fairs during the sixteenth and seventeenth
centuries.
 These fairs have a great history, which cannot be followed up
here, and there is the less need to make the attempt because the
inquiry is already in competent hands, those of Mr. Chancellor
Christie, of Darley House, Matlock. The authorities which may be
consulted are the following:—
1. “Ordonnances et priviléges des Foires de Lyon, et leur antiquité
avec celle de Brie et Champagne et la confirmation d’ialles par sept
roys de France.” Printed at Lyons in 1560, and subsequently.
2. “Cat. de la Bib. Lyonnaise a M. Costa redige par Aime
Vingtrisme.” (Lyon, Brun, 1853.) Pp. 458-61. Nos. 10,353-10,415.
3. A Memoir addressed to Charles VIII. in 1485, and presented by
M. Pericaud ainé in his privately printed “Notes et documents pour
servir a l’histoire de Lyon, 1483-1546” (Lyons, 1840).
4. In the “Proces de Bandiction de la Maison Neuve Accusé
d’heresia à Lyon 1534,” printed by Fick, Geneva, in 1873.
Montrichard (in Touraine).—This fair was famous for the great
concourse of traders to it from all the provinces of the kingdom; but
particularly for the great trade in woollen stuffs, amounting on an
average to some 12,000 pieces at each fair.
Rheims.—This city had formerly four fairs; it has now two only, May
and October—the great fair on St. Remigius’ day. These were all free
fairs, two of the original fairs lasting eight days, the others but three
days. Their franchises were mainly the same as those of
Champagne. A very large commerce was in early times transacted at
these.
Rouen.—This ancient trading city had two fairs; the one called
Candlemas fair, beginning on the 3rd February, and the other called
Pentecost fair, opening the day after the festival. They each
continued fifteen days, and were much frequented by foreigners,
particularly the Dutch, British (English and Scotch), and those of
other northern nations; its advantageous position for trade, by
reason of facilities of water carriage, offering great inducements to
the concourse of foreign traders.
 Goods sold and exchanged at these fairs, and carried out of the
city during the fifteen days, paid but half dues outwards.
Toulon.—This town—the Plymouth of France—has a fair, not
designated “free,” which commences on 3rd November, and
continues “fifteen working days.” Its franchises, granted in 1708,
were that no goods while it lasts are subject to any duties; and all
traders, alike French and foreigners, enjoy the franchises and
liberties granted to the fairs of Lyons, Brie, Champagne, Rouen, and
other cities. These underwent some modifications in the following
year, at the instance of the farmers-general of the revenues of
France.
Troyes.—This town (one of the cities in Champagne) was noted in
the middle ages for its great fairs, of which there were two—one
being fixed to the Monday after the Second Sunday in Lent; the
other commencing on 1st September. Philip of Valois granted the
privileges of these fairs.
A lasting record of the importance of the dealings thereat is
handed down to us in the form of “Troy (Troyes) weight,” used in
connection with dealings in the precious metals. It is said that this
system of weights was brought from Cairo by the crusaders, and
was first and permanently adopted as the standard of weight in the
dealings of the fairs of Troyes. Hence it may be inferred that the
trading was largely in the precious metals, in spices, and in drugs.[9]
Goods sold at these fairs were exempted from all customs
outwards, local dues excepted, under certain restrictions.
It is recorded especially of these fairs, that they had a staff of
notaries for the attestation of bargains, courts of justice, police
officers, sergeants for the execution of the market judges’ decrees,
and visitors—the prud’hommes—whose duty it was to examine the
quality of goods exposed for sale, and to confiscate those found
unfit for consumption. The confiscation required the consent of five
or six representatives of the merchant community at the fair.
 Sismondi, in his “History of the Italian Republics,” writing of the
events of the thirteenth century, says:
The Tuscan and Lombard merchants however trafficked in the
barbarous regions of the West, to carry there the produce of their
industry. Attracted by the franchises of the Fairs of Champagne and
of Lyons, they went thither, as well to barter their goods as to lend
their capital at interest to the nobles, habitually loaded with debt;
though at the risk of finding themselves suddenly arrested, their
wealth confiscated by order of the King of France, and their lives too
sometimes endangered by sanctioned robbers, under the pretext of
repressing usury. Industry, the employment of a superabundant
capital, the application of mechanism and science to the production
of wealth, secured the Italians a sort of monopoly through Europe:
they alone offered for sale what all the rich desired to buy; and
notwithstanding the various oppressions of the barbarian kings,
notwithstanding the losses occasioned by their own oft-repeated
revolutions, their wealth was rapidly renewed.
Inspectors of Fairs.—In the course of the preceding notices of the
chief fairs of France various references have been made to the
inspection of goods, as forming part of the regulations of such fairs.
These inspectors were appointed by the state. It was their business
to attend at all fairs where there was any considerable trade in
woollen and other textile fabrics; to inspect and mark them; and if
deficient or not conformable to the authorized regulations, to seize
them. Such examination it is obvious required to be made with great
circumspection and reserve, and at hours suited to the convenience
alike of buyers and sellers. The inspectors were usually
accompanied, in the performance of their duties, by the judge of the
police of manufactures, and the wardens and jurats of trades in the
respective places.
Some free fairs had their own judges and particular jurisdiction.
An examination of M. Bottin’s “View of the Fairs of France” goes to
show that they took place mostly on the frontiers of the kingdom, or
on the marches of ancient provinces; or at the foot of high
mountains, or at the beginning or end of the snow season, which for
months shuts up the inhabitants in their valleys; or in the
neighbourhood of the famous cathedrals or churches frequented by
flocks of pilgrims; or in the middle of rich pasture tracks. But there
are some marked exceptions to these rules.
The establishment and abolition of fairs—with the exception of
cattle markets and the markets of the metropolis—are now generally
left to the discretion of the departmental prefects.
 CHAPTER XXI.
THE FAIRS OF PARIS.
The City of Paris had fairs in great variety, some of which I now
proceed to notice.
St. Denis or Lendit Fair.—One of the earliest, perhaps the first,
was the mercantile fair of St. Denis, chartered early in the seventh
century by Dagobert “in honour of the Lord and to the glory of St.
Denys at his festival.” This fair, by reason of the privileges granted,
became known under the name of the forum idictum—whence
l’indict, and its corruption to landit and lendit. To it came the iron
and lead of the Saxons, the slaves of the northern nations, the
jewellery and perfumes of the Jews, the oil, wine and fat of
Provence and Spain, the honey and madder of Neustria and Brittany,
the merchandise of Egypt and the East.
The fair, which lasted ten days from the 10th of October, was
opened by a procession of monks from the Abbey of St. Denis; and
in later times it was usual for the Parliament of Paris to allow itself a
holiday, called Landi, in order that its members might take part in
the great marriage-feast of commerce and religion: just as the
English Parliament usually finds relaxation in horse-flesh and
mammon on the “Derby day” at Epsom!
English merchants frequented this fair in the ninth century, vide
Cunningham’s “English Industry and Commerce,” 1882, p. 82.
But St. Denis had another fair, at one time famous, to which
tradition has accorded the following origin. The Paris Cathedral
received from Constantinople, in 1109, some fragments of the cross,
regarded as authentic. The populace could not find room in the
church where they were deposited in any one day; hence the bishop
carried them in great pomp to the plain of St. Denis, where there
was room enough for the vast concourse of worshippers who
assembled to contemplate and adore. This ceremony and procession
were renewed at stated periods. The schools of the cloister of Notre
Dame had early taken part in the processions; and finally the
students of the University of Paris claimed it as a patron festival,
which it certainly was not.
In process of time a mart or fair became established on the
recurrence of this Church festival. The ground was regarded as
consecrated for the purpose. On each 12th of June (the day after
the festival of St. Barnabas) the procession took place. It was at a
later period called the “Feast of the Parchment.”
Early in the morning of the day of procession, the students, attired
in their best, assembled on horseback at the top of Mount St.
Geneviève, to accompany the Rector of the University, who, arrayed
in his scarlet cloak, and wearing his doctor’s cap, proceeded on a
mule or hackney, accompanied by the deans, proctors and
myrmidons, to the plain of St. Denis, where the market for the sale
of parchment was already opened. The rector upon reaching the fair
caused to be put aside as much parchment as would be required by
the University for the coming year, and received from the sellers a
donation equivalent to £100 of the present day. This I assume was
the toll paid for the right of holding the fair.
After this the students alighted from their horses, and instead of
forming part of the procession back to Paris, amused themselves at
the fair. This invariably led to riot and disorder, and not a year
passed without blood being spilt. Thus from the fifteenth and
sixteenth centuries the decrees of parliament against the carrying of
arms or sticks, which were continually being renewed and always
neglected, testify to the gravity of the evil, and to the difficulties of
putting an end to it.
At last, in 1566, the fair was transferred from the plain to the town
of St. Denis, and at about the same period paper began to
supersede parchment even for public documents. The rector,
therefore, ceased getting a supply of parchment at the fair, and the
students having no further pretext for attending, it speedily fell into
disuse. By the beginning of the seventeenth century the only vestige
of it left was the general holiday which the rector granted to the
students of the University upon the first Monday after the feast of
St. Barnabas, vide Lecroix’s “Science and Literature in the Middle
Ages,” pp. 34-36.
St. Germain.—This fair was held in a large permanent building
specially provided, constituting something like twin market halls,
elegantly constructed of timber, and long regarded as models of
construction. The two halls embraced nine streets in line intersecting
each other and divided into twenty-four sections or aisles; the shops
having little rooms or store-houses over them, and behind some of
them were open spaces, with wells—regarded as of importance in
case of fire, although not proving of much avail when the event
occurred. The streets were distinguished by the names of the
different trades conducted in them—as Goldsmiths’ Street, Mercers’
Street, &c.
The fair was opened the day after Candlemas Day. It was greatly
frequented by traders from Amiens, Beaumont, Rheims, Orleans,
and Nugent, with various sorts of cloth and textile fabrics. The
goldsmiths, jewellers, and toymen of Paris made a fine display of
their wares.
There were brought to this fair, one year with another, some 1,400
bales of cloth and other woollen stuffs, of which the inspector of
manufactures at the Custom-house, Paris, was required to keep a
particular register. Two inspectors of the fair were required to be
present at the opening of the bales of goods. There was also a
further inspection made by the Masters and Wardens of the Guilds of
Drapery and Mercery.
I find a graphic account of this fair in Lister’s “Travels in France,”
1698, which I here transcribe:
We were in Paris at the time of the fair of St. Germain. It lasts six
weeks at least; the place where it is kept, well bespeaks its
antiquity; for it is a very pit or hole, in the middle of the Faubourg,
and belongs to the great abbey of that name. You descend into it on
all sides, and in some places above twelve steps; so that the city is
raised above it six or eight foot.
The building is a very barn, or frame of wood, tiled over;
consisting of many long allies, crossing one another, the floor of the
allies unpaved, and of earth, and as uneven as may be: which
makes it very uneasy to walk in, were it not the vast croud of people
which keep you up. But all this bespeaks its antiquity, and the
rudeness of the first ages of Paris, which is a foil to its politeness in
all things else now.
The fair consists of most toy-shops, and Bartholomew-fair ware;
also fiance and pictures, joiner’s work, linen and woollen
manufactures; many of the great ribband shops remove out of the
Palais hither; no books; many shops of confectioners, where the
ladies are commodiously treated.
The great rendezvous is at night, after the play and opera are
done; and raffling for all things vendible is the great diversion; no
shop wanting two or three raffling boards. Monsieur, the Dauphin,
and other princes of the blood come at least once in the fair-time to
grace it. Here are also coffee-shops, where that and all sorts of
strong liquors ... are sold.
Knavery here is in perfection as with us; as dexterous cut-purses
and pick-pockets. A pick-pocket came into the fair at night,
extremely well-clad, with four lacqueys with good liveries attending
him: he was caught in the fact, and more swords were drawn in his
defence than against him; but yet he was taken, and delivered into
the hands of justice, which is here sudden and no jest.
I was surprized at the impudence of a booth, which put out the
pictures of some Indian beasts, with hard names; and of four that
were painted, I found but two, and those very ordinary ones, viz. a
leopard, and a racoun. I asked the fellow, why he deceived the
people, and whether he did not fear cudgelling in the end: he
answered with a singular confidence, that it was the painter’s fault;
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