Reviewed by Alicia Jaruga University of Lodz (Poland)

Many books and papers have been devoted to the history of accounting, but only a few of them have been concerned with the development of accounting thought. This book successfully provides an integrated history of accounting thought around the world, emphasizing the less wellknown contributions made in Russia and the Soviet Union.

Professor Sokolow’s primary question is: what does the history of accounting thought teach us? In offering answers, he reveals a profound and wideranging knowledge of the subjectmatter. In the light of the history of accounting research, he distinguishes the following approaches:

1. Philosophical — the approach adopted particularly in the works of F.W. Jezierski and J.M. Galperun, in the East, and of A. Haara. in the West.
2. Documentary — used by O.O. Bayer, H.F. Szirokow and B. Penndorf.
3. Synthetic — used by N.S. Pomazkow and A.I. Lozinski.
4. Analytic — used by A.K. Littleton and B.S. Yamey.

It must be said, however, that Sokolow does not take into account modern developments in accounting theory in the West, such as the work of R. Mattessich and Y. Ijiri.

A lot of attention is paid to economic records in antiquity and the Middle Ages. Further, the author analyzes the conditions in which the dualism of accounting arose. Next, he characterizes the development and expansion of doubleentry bookkeeping in Europe between the 15th and 18th centuries as the period when the language of accounting, as well as the structure of accounting records, for example, was created. In this way, he argues, accounting became a science: it developed a methodology for the transformation from a set of empirical and dogmatic rules to a device for the investigation of economic reality. This final transformation took place, according to Sokolow, at the turn of the 19th century.

At this time, E. Leote and A. Gilbo identified three functions of accounting which Sokolow argues remain valid:

1. To establish a logical structure of recordkeeping.
2. The social function, which is related to the social class structure (today we would say this was articulated by the legal regulation of accounting).
3. The economic function, to steer economic activity by means of accounting information.

He also states that there were concurrent accounting theories which were based on mathematical models; however, these theories did not substantially change the existing paradigm.

The development of accounting thought in prerevolutionary Russia is a particularly strong point of the book. He begins his discussion with religious cloisters and then takes us through manors, households, trade, building construction and industrial production. The author points out that the development of accounting was limited for many years by the fact that, in accounting, the Byzantine practice of literal signs was adopted instead of Roman or Arabic numerals.
The acceleration of the development of accounting, especially in governmental accounting, followed the administrative reforms of Peter I in the eighteenth century. It is believed that Western models, in particular those taken from Sweden, were adopted.

Doubleentry bookkeeping was mainly used in trade rather than manufacturing because the latter was mainly stateowned and did not operate on the principle of economic accountability (although it was well controlled).

In the 19th century, the development of manufacturing resulted not only in the application of doubleentry but also a much higher level of accounting. At the same time, in the academic literature, original doctrines of accounting were created by K.J. Arnold, I. Achmatov, and E.A. Mudrov. At the end of the 19th century and the beginning of the 20th, the scientific foundations for the paradigm of doubleentry were formulated. Special attention is paid by the author to the contribution made to European accounting thought by L.I. Gomberg (who won the gold medal in Paris for, among other things, founding the journal Ekonomologia) as well as by A.M. Wolf, N.I. Popov, A.M. Galagan, A.P. Rudanowski and others. Between 1783 and 1917, some 1356 books on accounting were published in Russia; according to Sokolow, their level of sophistication was at least as high, and in many cases higher, than in the rest of the world.

He now turns to a discussion of accounting in capitalist countries in the 20th century, distinguishing the following schools: German, French, Italian and AngloAmerican. In his opinion, one of the fundamental ideas of accounting in these countries is not only historic recordkeeping for organizations but also projections of what could happen and what should happen. Among the characteristic trends of contemporary accounting that Sokolow identifies in these countries is a supposed development of a unified international methodology, terminology and chart of accounts. In addition, he recognizes the move from the empirical to the theoretical and from deterministic to stochastic approaches to research. Finally, he recognizes the increasing independence of the accounting profession from the management of enterprises as well as the increased prestige of the profession generally.

The author also considers accounting in socialism in historical perspective, even extending to accounting for the physical units of labor and energy. He offers a new paradigm of accounting, which he calls ‘Soviet accounting’. In addition, he argues against the view that the development of accounting will depend on dataprocessing technology which has traditionally emphasized quantitative, descriptive models. Instead, he maintains that it is necessary to expand these models to include evaluation of alternative projects and economic efficiency. Sokolow also refers to some notable achievements by accounting scholars in East European countries.

The book ends with his attempt to answer his primary question: What does the history of accounting thought teach us? He considers the legal and economic dimensions of accounting. He states that accounting as an instrument of management gives information not only for decisionmaking but also of the consequences of decisions. As a result, the subject of accounting is contingent upon the goals of management; the example he gives is of standard costing and variance analysis. The essence here is not that accounting provides a mirrorlike reflection of reality but a conceptualization of the economic process for efficient management. In his opinion, the most important contribution made by accounting thought lies in the creation of artifacts, such as ‘cost’, ‘revenue’, etc.

The bibliography is extremely rich, consisting of 460 items in several languages. This book will be of interest not only to academics but also to professional accountants with a desire to understand the intellectual foundations of the discipline.