Reviewed by Jan R. Heier Auburn University at Montgomery
The history of Australia is a mystery to the average reader. Most see the country’s history as nothing more than a shipload of convicts being deposited at Botany Bay and left to fend for themselves. In this book, Carnegie has lifted some of that mystery away from the history of Australia and has placed the development of the country in its proper perspective. More im¬portant to this review, he has traced the role that accounting and accountants played in taking Australia from a colonial backwater to a modern country. Carnegie also has showed the importance of the development of accounting principles to the development of a modern economy.
The book, which came from the author’s doctoral disserta-tion, contains a thorough literature review and a methodology chapter that outlines the archival sources and the way they were used in the study. A short historical background of the societal, political, and legal nature of colonial Australia pro-vides the basis for the sound analysis of accounting develop-ment used by the author in later chapters of the book. Finally, the author gives short biographies of the people who owned the sheep stations and a review of the contents of each of the 23 manuscripts of business records used for the study. This gives the book a very personal touch and makes the people who com-piled the manuscripts more than a century ago very real.
Using the information from the manuscripts, Carnegie tells the story of sheep ranching in the Western District of Victoria before the federation of Australia, a period from about 1834 to 1901. These manuscripts include both accounting data and personal accounts of the proprietors of the stations. The archival research helps to track the development of accounting usages and practices among the sheep stations and related busi¬nesses and their effect on the development of the accounting profession in Australia.
In later chapters, the author discusses the nature of colo¬nial pastoral records. In brief summary, the accounting on the sheep stations primarily involved record keeping for wool production. In the early part of the 19th century, this record keeping was largely non-financial in nature and dealt with such matters as the number of bales of wool produced and number of sheep shorn. Although records were also kept on wool sales, most of financial records about the stations’ expenses and debts were kept in what the author called personalized ledgers. Though the term “ledger” was used, the author indicated that neither double-entry accounting nor periodic financial state¬ments were the norms until the 1890s. Finally, as the political nature of the colony changed post-1870, the influence of pro¬fessional accountants became important to the stations and affected the direction of accounting change.
Simply put, in the 1870s a colonial government, based on colonial liberalism, instituted a death duty or estate tax on sheep stations. Such a law resulted in the need for better accounting records compared with “bare essential” records described by the author for the earlier period under study. Besides legal and political considerations, the author indicated that cultural and environmental factors also influenced the development of accounting. Economic changes in the colony put an end to the original barter system as money became more plentiful. Finally, as the educational level of the people of the colony rose, the ability to understand financial texts made the adoption of double-entry accounting easier.
Carnegie’s book is a very good example of the power of archival research and its ability to trace accounting change over time. His story of the development of pastoral accounting in colonial Australia is well-researched and the conclusions he puts forth to explain the nature of and reasons for accounting change are very sound. The research presented in the book is a very good addition to the accounting historian’s knowledge and understanding of why and under what conditions accounting principles develop.
