Reviewed by Jack Ruhl Louisiana State University

The emblem of the Academy of Accounting Historians bears the Latin inscription, “Praeterita Illuminant Postera,” which is literally translated as “Past events illuminate future events.” The inscription hints at a way of evaluating accounting history research; that is, to what extent does an historical study illuminate future events? The more the research helps us under¬stand and predict accounting theory and practice, the more valuable is the research.

Judging by this standard. Monograph 6 is an important achievement in accounting history research. The monograph is a collection of ten studies which has cost accounting as its uni-fying theme. Six of the studies base their conclusions primarily on pre-20th century materials from both within and outside the U.S. Three other papers reexamine cost accounting practices in new and insightful ways. The final study in the monograph out-lines pitfalls for accounting history researchers.

As an example of a pre-20th century study, Richard Mattessich [“Counting, Accounting, and the Input-Output Prin-ciple: Recent Archeological Evidence Revising Our View on the Evolution of Early Record Keeping”] examines archeological evidence of accounting practices during the period 8,000 B.C. to 3,000 B.C. Mattessich writes that the ancient people of the Middle East transferred clay tokens from one place to another as a representation of an actual economic event. He uses this and other evidence to argue that the foundation of accounting is not to be found in double entry bookkeeping. Rather, the foun-dation of accounting is found in an input-output principle which is represented by the transferring of the tokens. Put dif¬ferently, by moving the clay tokens from one place to another, ancient Middle Eastern people recognized the input-output character of an underlying economic event. Double entry was of secondary importance, evolving in the service of the input-out¬put concept.

Richard Fleischman, Lee Parker and Wray Vamplew [“New Cost Accounting Perspectives on Technological Change in the British Industrial Revolution”] reassesses the conventional wis-dom that the period of the Industrial Revolution was a “cost accounting wasteland” [p. 14]. The authors examined the ac-counting records of several firms operating in Britain during that era and found that detailed cost analyses formed the basis for major management decisions in these firms. Such decisions included adoption of new technologies and capital investment. Further, the authors use these accounting records and related partnership correspondence to argue that the shortcomings of cost accounting during the British Industrial Revolution have been greatly exaggerated. Instead of being a hindrance to indus¬trial development (the conventional wisdom again), cost ac¬counting practices helped managers of that time to make in¬formed decisions on the choice of technology.

Focusing on a 20th-century regulatory agency, Frank Rayburn [“The Cost Accounting Standards Board: Its Creation, Its Demise, and Its Reestablishment”] recounts the history of the Cost Accounting Standards Board (CASB) since its initial establishment in 1970. He explains the structure of the CASB, lists the nineteen Standards promulgated by the CASB, and de¬scribes the political and economic forces which led to the de¬mise of the original CASB. Rayburn then describes forces which led to the 1988 reestablishment of the CASB.

Murray Wells [“The Nature of Activity Costing”] looks at Johnson and Kaplan’s Relevance Lost: The Rise and Fall of Man¬agement Accounting (1987) from an historical perspective. Wells argues that the “activity costing” suggested by Johnson and Kaplan is not a dramatic new breakthrough, but simply another conventional product costing system. Further, Wells restates his conviction that “there should be NO allocations of overhead to products, cost centers, divisions, or whatever” [emphasis in original, p. 133]. He concludes that Johnson and Kaplan’s major

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contribution is that they underscore the need for managers to identify costs that are under the control of those managers. Wells’ conclusion implies a need for future accounting research¬ers to reexamine the perennial issue of cost allocation.

Four of the ten papers in the monograph have been de¬scribed here. All the papers in the monograph are interesting, clearly written, and address important cost accounting issues. Monograph 6 is important because it illuminates (1) the basic nature of cost accounting, (2) problems with currently accepted solutions to cost accounting problems, (3) the role of cost ac-counting on society, and (4) the role of society on cost account-ing practice. Finely Graves has done an excellent job editing this volume, which is an appropriate tribute to the life and work of accounting history scholar Paul Garner.

REFERENCE

Johnson, H. T. and Kaplan, R. S., Relevance Lost: The Rise and Fall of Manage-ment Accounting, Boston: Harvard Business School Press, 1987.