Reviewed by Kathleen Cooper University of Wollongong
The book comprises seven chapters on a number of accounting history issues from the fifteenth century to the present. The papers were selected from the programme of a oneday conference held in Edinburgh in 1994 for an invited audience of accounting practitioners and historians. The major theme of the conference was the history and influence on accounting of doubleentry bookkeeping. The targeted audience of the papers included in this text is undergraduate and graduate accountancy students and teachers with an interest in the history of accounting in Britain and America.
Given its targeted audience, the text is well set out. While each of the papers stands alone, they are set out in a manner that tells a complete and integrated story starting with the publication of the first book dealing with doubleentry bookkeeping and then tracing the development of financial accounting and reporting and cost and management accounting from the fifteenth century through to the present and the establishment of an institutionalized accountancy profession. The final chapter deals with the evolution of the information technologies and their impact on the accountancy profession.
There are a number of common themes throughout the papers that make it clear that accounting is not an isolated, technical process that can be studied without reference to its social and political environment. For example, the paper dealing with Pacioli and the emergence of doubleentry bookkeeping traces the social factors that may have influenced the development of the technique and also explains why Pacioli may have included it in a mathematics text. In addition, the issue is raised as to who Pacioli was and how it happened that his particular treatise was chosen for the newly developed art of printing. The paper suggests that for Pacioli, it was perhaps a case of “not what you know but whom you know” [p. 10] as his friends and associates included Dukes, Popes, leading intellectuals and artists.
While personal associations and alliances may not have been as important in later accounting developments, the ability to play the political game is clearly evident in the papers dealing with professionalisation of accountancy and the setting of accounting standards. These activities are depicted as serving political purposes in terms of not only gaining prestige and status for accountants but also a monopoly over accounting practice and how it is determined. Ample evidence is provided to indicate that the accountancy profession has forsaken its stated objective of protecting the public interest in favour of its own selfinterests.
The accountancy profession’s penchant for selfinterest is clearly evident in both papers dealing with financial accounting and reporting. The first deals with the historical development of financial reporting and illustrates an ever increasing tendency to conceal or distort information so as to present the company as profitable and wellmanaged when it was often on the verge of financial ruin [p. 47]. While accounting standards emerged to curb this trend, the political nature of accounting standard setting effectively ensured that flexibility was enshrined in the resuiting standards. The preparers of financial statements benefited at the expense of the users.
The impact of economic and social factors is also apparent in the papers dealing with cost and management accounting and the impact of information technology on the accountancy profession. The papers dealing with cost and management accounting detail the influence of industrialization, two world wars and the concomitant need for information on management accounting. The second of these papers looks at specific developments including profit reporting and inventory valuation, budget planning, cost control and pricing policy. Tt also touches on the impact of information technology and signals a warning to accountancy that as many of the scorekeeping activities are being automated and undertaken by nonaccountants, their role must change. A more eclectic approach to management is required making use of organization theory, behavioral sciences and information theory.
This warning is seconded in the final paper dealing with information technology and the accountancy profession. As the paper notes, the accountancy profession had the opportunity to participate in the development of information technology and gain control over its application to the generation of accounting information. However, it allowed the opportunity to pass initially. Information technology is not static and as ever more advances are made; as the use of information technology increases, the accountancy profession has a chance to participate in its development and application. The paper, however, concludes with a warning that producing ever more information may not be useful, particularly when it is essentially ignored by management. It is suggested that more concern be directed to the environment and an efficient use of resources than an ever increasing investment in technology.
In concluding, it must be said that for those seeking a definitive history of accountancy, in the Britain and America, this text will be a disappointment. This would be an impossible task for any text of this size. However, by combining what are essentially literature reviews with an overview of accountancy developments in the context of their social and political environments, this collection of readings should be of interest not only to students and teachers of accounting but also those looking for areas for further research. Many areas requiring further examination are identified. The notes at the end of most of the papers often clarify issues and, at the same time, point to avenues for further research. The extensive bibliography is also most useful. Overall, this is a worthwhile text.
