Richard Vangermeersch
UNIVERSITY OF RHODE ISLAND

A COMMENT ON SOME REMARKS BY HISTORIANS OF COST ACCOUNTING ON ENGINEERING CONTRIBUTIONS TO THE SUBJECT

Abstract: M. C. Wells wrote in Accounting for Common Costs that engineering impacts on cost accounting had ended by 1910. This paper reports the results of a review of the Accountants’ Index from 1920 through 1949 for engineering sources listed under the general category of the two sections of “Cost and Factory Accounting” and “Depreciation, Depletion, and Obsolescence.” The results show that engineering sources on these topics peaked late during the decade that began in 1910 and did not become insignificant until the 1930s.

Two studies in the history of cost accounting have commented on engineering literature and cost accounting topics. M. C. Wells re¬ported that “whereas literally hundreds of articles and books on costing and accounting were published by engineers during the 30 years prior to 1910, very little was published after that date.”1 Paul Garner wrote that “industrial engineers, rather than cost or general accountants, took a more active interest in costing prob¬lems in the early development of the subject in this country.”2 This author decided to investigate the cutoff date of engineering contri-butions to the accounting literature. The author’s interest in this topic developed while conducting research on engineering input into accounting decisions of capital intensive firms. To establish the cutoff date of engineering contributions to accounting litera¬ture, the author counted the engineering articles and books refer¬enced in the “Cost and Factory Accounting” and the “Depreciation, Depletion, and Obsolescence” sections of the Accountants’ Index from 1920 through 1949. These two classifications of “Cost and Fac¬tory Accounting” and “Depreciation, Depletion, and Obsolescence” are, in the author’s view, the two most likely classifications within the Accountants’ Index to include inputs from engineering journals and books. The study was limited to the Accountants’ Index be¬cause it is the focal point for literature search in accounting. How¬ever, the engineering articles and books referenced by the Accountants’ Index were very, very similar to the items listed under similar headings in the Engineering Index for these years.

Both the “Cost and Factory Accounting” and the “Depreciation, Depletion, and Obsolescence” sections have a general category fol-lowed by a list of more specific categories. The author investigated only the general listings for two reasons. Firstly, there was substan¬tial overlap between items in the general categories and items in the specialized categories. Secondly, the length of the total cover¬age on depreciation was extensive and detailed. For instance, in the 1920 Accountants’ Index listings on depreciation extended from pages 342 to 679, whereas the general listing went only from pages 344 to 353. The coverage on pages 353 to 679 included numerous pages of listings dealing with depreciation lives for different types of fixed assets.

Table 1 lists the number of sources of literature on engineering in the “Cost and Factory Accounting” section of the Accountants’ Index from 1920 through 1949. It is important to note that the 1920 Accountants’ Index included all literature on accounting collected by the American Institute of Accountants (now the American Insti¬tute of Certified Public Accountants) over the years prior to 1920, as well as 1920 items. An analysis by year of the engineering sources listed in the 1920 Accountants’ Index is presented in Table 2.
Table 1

Sources of Literature on “Cost and Factory Accounting” Listed in the Accountants’ Index

Date of Accountants’ Accounting

Index Engineering and Other Total
1920 297 556 853
1920-23 118 422 540
1923-27 83 568 651
1927-31 8 200 208
1932-35 6 105 111
1936-39 1 166 167
1940-43 1 127 128
1944-47 2 123 125
1948-49 1 59 60

Table 2

Engineering Sources of Literature
on “Cost and Factory Accounting”
Listed in the 1920 Accountants’ Index by Year

Number
Year of Items
Prior to 1900 4
1900 2
1901 3
1902 2
1903 7
1904 2
1905 4
1906 5
1907 6
1908 11
1909 9
1910 5
1911 12
1912 19
1913 15
1914 24
1915 25
1916 25
1917 29
1918 32
1919 35
1920 21
Total 297

The topic of Depreciation has spanned the history of cost ac¬counting and it is especially important in cost accounting for capital intensive firms. Table 3 lists the number and percent of the sources of literature on “Depreciation, Depletion, and Obsolescence” listed in the Accountants’ Index during the period covered in this study. Any non-tax item published in an engineering journal or book was classified as Engineering. Table 4 shows an analysis by year of the engineering sources listed in the 1920 Accountants’ Index.

138 The Accounting Historians Journal, Spring, 1984
Table 3
Sources of Literature on Depreciation
Listed in the Accountants’ Index

Date of Accountants’ Accounting

Index Engineering and Other Total
1920 124 358 482
1920-23 18 101 119
1923-27 13 141 154
1927-31 13 145 158
1932-35 7 132 139
1936-39 8 154 162
1940-43 8 122 130
1944-47 3 113 116
1948-49 1 178 179

Table 4

Engineering Sources of Literature on Depreciation Listed in the 1920 Accountants’ Index by Year

Number
Year of Items
Prior to 1900 1
1900 0
1901 0
1902 2
1903 0
1904 0
1905 2
1906 0
1907 6
1908 4
1909 3
1910 7
1911 14
1912 8
1913 7
1914 12
1915 10
1916 10
1917 24
1918 5
1919 4
1920 5
Total 124

The tables presented show that the 1910 cutoff date stated by Wells is not the appropriate cutoff date for engineering interest in, and potential influence on accounting literature. Engineering inter¬est in accounting peaked in the latter part of the decade that began in 1910; however, there was substantial interest as late as the 1930s. Accounting historians concerned with the field of cost accounting should research the engineering literature beyond 1910 to at least the 1930s to note the significant engineering contributions to cost accounting in those years.

140 The Accounting Historians Journal, Spring, 1984

FOOTNOTES

1Wells, p. 92. 2Garner, p. 342.

BIBLIOGRAPHY

Garner, Paul. Evolution of Cost Accounting to 1925. Accounting History Classic Series. University, Alabama: The University of Alabama Press, 1954, 1976.
Wells, M. C. Accounting for Common Costs, Monograph 10 Champaign-Urbana, Illinois: Center for International Education and Research in Accounting, Univer-sity of Illinois, 1978.