Back in Chapter 1 we asked you to identify the relative merits of the UK and French approaches to financial reporting. To recap, the French system is based on the ‘plan comptable’, a specification of exactly which accounts must be kept to record which transactions and how those details are then to be presented in the income statement and in the balance sheet. This can be contrasted with the less directed approach used in the UK and outlined in this chapter.

For each of the characteristics of good accounting that you have now explored

(relevance, reliability, comparability and understandability), suggest one reason to prefer the UK system and one reason to prefer the French system. You may like to set out your answer as a table – we have.