Reviewed by Jean E. Harris Penn State University at Harrisburg
What is the relative importance of regulation and of market forces as means of explaining changes in the accountability of municipal corporations? In addressing this question, Coombs and Edwards postulate a gradualist theory of change. They argue that changes in accountability tend to results from apparently unrelated events which on examination are part of a metamorphosis rather than from a single causal factor.
Consistent with a gradualist theory, Coombs and Edwards design a study of accounting change in municipal corporations which is broad in scope and thorough in detail. This study is recorded in Accounting Innovation: Municipal Corporations 1835-1935. It is motivated by the objective of understanding present practices as part of an evolution of developments. The scope of the study extends across five municipal corporations in the United Kingdom over a period of one hundred years. The municipal corporation in the United Kingdom is somewhat similar to the incorporated municipality in the United States. During the focal time period, it was distinguished by the growth of large public sector enterprises or trading services.
With a meticulous approach to detail, Coombs and Edwards retrieve and review archival data to trace developments in form and content of financial reports as well as developments in auditing requirements. Changes in practices are integrated into a background of competing and complimentary influences in a multifarious environment. Social context is viewed as a dominant variable which contributes to accounting change within municipal corporations and limited companies and to accounting differences between municipal corporations and limited companies.
Coombs and Edwards organize their study around eight topics each of which is addressed in a separate chapter. After discussing the design of the study in an introductory chapter, the next two chapters review the structure of local authorities and of regulatory frameworks. The study then moves to an ex-amination of accounting practices: record keeping, framework of accounts and capital accounting. With this background, power struggles over the performance of audits are explored, and basic audit issues are described. Coombs and Edwards then extend their analysis of accounting change within municipal corporations to support an analysis of comparison of developments in municipal corporations and with development in private companies. The model of change which emanates from the study is summarized in concluding comments.
Ultimately, Coombs and Edwards abandon regulation and market forces as significant influences on accounting change in municipal corporations. Regulation cannot account for changes in municipal reporting practices because changes in regulation over the 100 year focal period were inconsequential. Market forces cannot account for changes in municipal reporting prac-tices because there is no evidence of external demand for information and no evidence of the use of reports by external parties. The rejection of these two factors, leads Coombs and Edwards to construct an alternative model of environment that fosters change. Important environmental factors include: the antecedent introduction of accounting change in private companies, the emergence of an accounting profession with avenues for transferring innovation from private companies to municipal corporations, the growth of municipal corporations fostering demand from internal management for new information for decision making purposes, and the desire of elected officials and appointed administrators to publicize the success of municipal corporations.
Strengths exhibited in this book are organization of analysis around a theory of change, exhaustive scholarship, and informative illustrations. Coombs and Edwards accept the challenges that a gradualist theory of change incorporates. Of necessity their study must focus on practices over decades. From the way this study is recorded and from their prior publications, it is apparent that Coombs and Edwards worked on this study for a number of years. Their patient, thorough and systematic approach demonstrates a level of scholarship which is rare. They collect and report extensive amounts of factual evidence from archival sources. Throughout the book, charts, tables and other illustrations aid the reader. Refreshingly, they are willing to acknowledge that the cause of change is problematic. Their contribution is to identify mechanisms which are associated with an environment in which change occurred.
Two prior books1 by Coombs and Edwards, a series of ar-ticles published in academic journals from 1992 to 1994, and this book which incorporates and extends their journal publica-tions, establish Coombs and Edwards as leading experts on the accounting and reporting practices of municipal corporations in the United Kingdom. The topical area covered in Accounting Innovation: Municipal Corporations 1835-1935 include accounting history, governmental accounting, public enterprise accounting, theory of accounting change, and the operation of environmental change agents. Because this book offers public
‘The two prior books, Local Authority Accounting Methods, The Early Decade, 1884-1908 (New York: Garland, 1991) and Local Authority Accounting Methods, Problems and Solutions, 1909-1934 (New York: Garland, 1992), consist primarily of reproductions of period articles.
access to a wealth of archival data, it should be viewed a basic acquisition for libraries along with the two prior books by Coombs and Edwards. Although the ability to access archival data is important, the most significant contribution of this book is its analysis of a theory of influences on accounting changes. Because of the strength of evidence that Coombs and Edwards develop for a gradualist theory of change, this book is suitable as a supplementary reading particularly in graduate courses.
