INTERFACES

Tom Lee
UNIVERSITIES OF ALABAMA AND DUNDEE

HENRY RAND HATFIELD AND ACCOUNTING BIOGRAPHY

Focal text: S.A. Zeff, (1999), Henry Rand Hatfield: Humanist, Scholar, and Accounting Educator (Stamford, CN: JAI Press, 1999).

Abstract: The paper reasserts the importance of biographical research in accounting history by reference to Stephen Zeff’s book on Henry Rand Hatfield. It illustrates that depth studies of individual actors offers compelling insights to the history of accounting theory, practices and institutions. Biography also has the capacity to reveal insights which have a bearing on modern day issues.

THE IMPORTANCE OF BIOGRAPHICAL RESEARCH IN ACCOUNTING

We live in a world increasingly interested in its past. Public television in several countries offers a regular diet of historical programs, and cable television companies provide a channel de-voted exclusively to what its producers believe to be history. Shelves of bookstores groan with the weight of newly-published historical texts and novels. Historians combine university employment with part-time careers as media-based presenters on wind-swept moors and ramparts or in water-logged archaeological trenches. The brightest and the best of graduating classes in history are full-time researchers who can write best-selling historical texts. Thus, at least in the developed countries of the English-speaking world, an obvious appetite for history exists despite increasing concerns about the quantity and quality of history education in schools.

In the more specific world of accounting, however, we find conflicting signals about the state of its history. Despite a relatively thriving but small community of accounting historians, the subject does not appear to have a serious impact on the histories of professions and business. Accounting history is not taught in schools and is rarely contained in the accounting curriculum of universities. Indeed, in the United States where there are thousands of degree-awarding institutions, accounting historians have become an endangered species. Corporate scandals such as Enron, WorldCom and Xerox are criticized, debated and investigated by individual accountants with apparently very little sense or understanding of accounting history. As the old adage goes, history repeats itself.

Paying attention to its history is a major part of the solution to a problem and paying attention to the background and role of individual actors is a more specific solution. The need to study individuals in history is a matter that historians are increasingly recognizing [Jordanova, 2000, pp. 41-42]. Biographical histories not only provide insight, context, and explanation for broader historical issues. They are also popular with readers of history. A biography is a window into a past life and, depending on the depth of research, helps to satisfy our curiosity about fellow human beings. Our instinct for voyeurism means that we are interested not only in great deeds and events, but also in personal habits and weaknesses. Modern biographical research tends to lift the stone to find out what lies beneath it. It observes the privates and lance corporals of the army, as well as its generals and marshals. A recent example illustrates this argument. There have been many biographical studies of Arthur Wellesley, Duke of Wellington and his military successes and failures against the armies of Napoleon Bonaparte. However, thanks to the research of Urban [2001], we now know of Major George Scovell who was responsible for breaking the communication codes of Napoleon that gave Wellington a decisive advantage in his battles against the French in Spain in the early 1800s.

The same should be true of accounting history. In order to explain and understand accounting practices, developments, failures and successes, we need to know more about the ac-counting actors who were present. For example, in the development of the public accountancy profession in the United States, the clashes over auditor independence rules between the centralist American Institute of Accountants and the devolved American Society of Certified Public Accountants is explained, at least partially, by the enmity between George Oliver May of Price Waterhouse & Company and Eric Kohler of Northwestern Uni-versity [Previts and Merino, 1998, p. 244]. Researched biogra-phies of these men in relation to the issue of auditor indepen-dence would not only better inform us about the history of American public accountancy but also would provide lessons for us when dealing with the same issue in 2002 as a consequence of Enron et al.

This is not to suggest that accounting history has been de-void of biographical research. Indeed, biographies are a regular part of the accounting history literature. For example, in the newly-founded The Accounting Historian in 1974, the Academy of Accounting Historians had a series of biographies on leading researchers such as John Bennett Canning and DR Scott. Stewart [1977] published brief biographical sketches of the earliest Scottish chartered accountants in the second half of the 19th century. Kitchen and Parker [1980] researched six leading thinkers and writers about accounting and auditing practice who covered a period from 1841 to 1954. These biographies, however, were relatively brief and antiquarian in their nature in the sense of concentrating on the traditional history model of names and dates. More recently, the accounting history literature has contained more personalized accountants of the less well-known contributors to accounting (e.g. Carnegie, Parker and Wigg, 2000; Lee, 2002).

Biography remains a very small contribution to accounting history. In a listing of accounting history publications in 1999, Anderson [2000] reveals that Zeff [1999] was the only biographical study of that year. It is also the subject of this commentary.

ZEFF ON HATFIELD

Henry Rand Hatfield was the first full-time professor of ac-counting in an American university. In 1904, following doctoral studies and faculty appointments in political economy at the University of Chicago, he was appointed Associate Professor of Accounting at the University of California at Berkeley. At Berkeley, Hatfield became known as the “dean of accounting teachers” – a title signifying his considerable influence in the United States as an academic accountant in the first half of the 20th century. Despite this lofty position in academia, there has been no extensive biography of Hatfield until Professor Stephen Zeff of Rice University published his text in 1999. The wait has been worthwhile and the book is a significant publication. Not only does it provide accounting historians with an in-depth analysis of Hatfield’s life and work, but it also gives clear insight to the post-foundational history of the American accountancy profession. This is exactly what biographical research should do. It uses the individual as a window on broader events and reveals the importance in the latter of social relationships as explanations [Bearman, 1993].

Zeff’s research on Hatfield began in 1963 when he was encouraged by Professor Maurice Moonitz at Berkeley to look at the Hatfield archive located there. This initial exposure led to a project that lasted 37 years – only a few years less than the length of Hatfield’s employment as an academic. The research is meticulous and the opinions and assessments objective and considered. The text is eminently readable and supported by detailed citations and a voluminous index. Hatfield’s published and unpublished papers are reproduced, and the distinguished British economic and accounting historian, Professor Basil Yamey of the London School of Economics and Political Science, contributes a thoughtful piece on Hatfield as an accounting historian. The book won the 2001 Hourglass Award of the Academy of Accounting Historians.

The structure of the book is relatively straightforward. It has a chronology that covers the first four chapters. These are followed by chapters dealing with Hatfield’s contributions, persona, and written work. The original text covers 248 pages and is accompanied by 46 pages of footnotes – of which there are 747. The index amounts to no less than 43 pages. Despite this considerable detail, the Hatfield story is told by Zeff in a way that allows the reader to be simultaneously informed and entertained. The footnotes, for example, are necessary in a serious historical study but have been relegated to the end of each chapter to provide accessibility without diminishing readability.

The book is an excellent illustration of how two forms of historical research can provide value in excess of what would have been possible from a single methodology. Zeff used the traditional form of accessing archives at various academic institutions including Berkeley, Chicago and North-Western. But he also interviewed numerous Hatfield family members, students and colleagues. The result is that each research method has informed the other and Hatfield, the man, is revealed as much as Hatfield, the name. In particular, Zeff has identified clearly the influence of Hatfield’s family background in the Methodist Church on his approach to accounting teaching, research, and practice. For example, the contemporary concern with the compatibility of wealth creation and morality was not an issue for Hatfield. Both could and should co-exist as allowed by Methodist theology. In addition, Hatfield believed that the purpose of accounting education was to get potential practitioners to think about accounting practice and its effects rather than to inculcate a particular set of accounting or bookkeeping techniques. More specifically, his academic purpose was to influence accounting practice rather than impress university colleagues. He was an intellectual who served the profession of accounting. Zeff describes him as a renaissance man.

HATFIELD’S CONTRIBUTION

Despite its considerable readability, Zeff’s book on Hatfield is not easy to review because of its breadth and depth. The range of topics is vast and is perhaps one reason why it took so long to produce. Hatfield was a unique member of the accounting profession and very different from the academic model currently seen in doctoral programs in the United States and elsewhere. It is doubtful if he would have been comfortable in a world of relatively meaningless “accounting” issues being thrashed to death statistically by economists masquerading as accountants. He certainly would have been startled at the existence of misreporting situations such as Cendant, Enron, Sunbeam, Waste Management, WorldCom, and Xerox, and the possibility that public accounting firms such as Arthur Andersen and PriceWaterhouseCoopers could have permitted them to exist. His Socratic method in the classroom was intended to nullify that possibility. Hatfield believed that accountants should be capable of thinking about the logic and relevance of the prac-tices they used, advised or audited. He did not provide rule-based solutions to accounting problems. Instead, he put students in a position to observe the idiosyncrasies of accounting systems. He also worked with practitioners to eradicate problems.

At heart, he did not believe in the notion that accounting existed as a discipline separate from others such as economics or law. He perceived accounting as a practical function with problems that could only be resolved by thinking practitioners. Thus, he sought integration of accounting education and practice and fought against any attempt to separate academics from practitioners. This approach is entirely consistent with his Methodist upbringing. Despite the fact that Hatfield was one of the founders of the academic organization that is now the American Accounting Association, and its President in 1919, he delayed by several years the initiation of The Accounting Review and had little time for accounting research. In the years when he was in a position to do so, he did not seek to expand the accounting faculty at Berkeley and had only one doctoral student -who never published.

Hatfield published less than might be expected from someone with such a long-standing national and international reputation. He wrote many papers that were not published and appeared to prefer to inform by personal presentation at conferences and seminars. It is certain that he would be sur-prised by the “publish or perish” principle of the current American accounting academy. As Zeff points out on a number of occasions, Hatfield was a scholar who was happiest when he was informing students, practitioners and colleagues about the views of others rather than his own. In this respect, he was very different from the academics that followed him such as William Andrew Paton, John Bennett Canning, DR Scott, Kenneth F. MacNeal, Ananias Charles Littleton, Richard Victor Mattessich, Raymond John Chambers, Yuji Ijiri, and Robert R. Sterling. The so-called golden age of normative accounting research in the 1950s and 1960s is not something with which Hatfield would necessarily have been comfortable. The setting up of alternative “straw men” of accounting in order to unveil a preferred solution to an accounting problem was not the Hatfield approach.

Zeff has set out clearly Hatfield’s distinctive contributions to accounting thought. First, accounting is not just a series of techniques for use in a designated function. It is also an academic subject that is dependent on other subjects such as economics and law, and is worthy of a place for study at universities. In this respect, Hatfield led the way in establishing an academic accounting community that was capable of competing for scarce university resources. Second, because accounting is technique-driven, it should be taught rather than researched. Hatfield did not appear to believe that the credibility and reputation of accounting as a university subject depended on the production of research output to impress university sponsors and managers. Third, good accounting practitioners are those who can think about the effects and consequences of particular practices – a characteristic apparently lacking in recent corporate disasters such as Cendant, Enron and WorldCom. Fourth, the role of accounting academics is to bring together current thinking on accounting and ensure that it is relevantly integrated into prac-tice. Again, this is totally at variance with contemporary contributions to accounting research that are increasingly inaccessible to most academics far less practitioners.

According to Zeff, Hatfield did not believe in forcing a solution to an accounting problem on practitioners. Instead, he believed that the credibility of academic contributions to accounting practice was best maintained by pointing out the idiosyncrasies of specific accounting rules (such as the “lower of cost or market” rule) and working with influential practitioners to effect change. Zeff believes that Hatfield’s resistance to accounting research was due to his failure to observe changes in accounting. However, an alternative hypothesis is that Hatfield believed that accounting academics lost their objectivity in analyzing accounting problems when they also advocated specific solutions. Perhaps the truth of the matter is somewhere in the middle. Certainly, Hatfield’s dominating approach meant that the early development of the American Accounting Association was limited to teaching and its research influence was slow to develop.

Hatfield’s influence on individuals was also problematic. He rarely worked with others on projects, and his one major co-authored work with Thomas H. Sanders and Underhill Moore in 1937 for the American Institute of Accountants was not a success. Hatfield had only one doctoral student during his academic career and his classes were typically small because of student fears that his standards were too high. Hatfield offered courses that were either never run or had short lives. He frequently argued with accounting colleagues and appeared to have better relations with colleagues in other subject areas. Certainly the main influences in his academic work were economic philosophers with European connections rather than fellow accounting academics in the United States.

HATFIELD’S PLACE IN HISTORY

Irrespective of these “oddities” in Hatfield’s career, it is difficult to deny his place in accounting history. As the first American accounting academic he was always going to have a niche in the subject’s pantheon. But his clear intellectual approach to the identification and analysis of accounting problems, and his constant advocation of the need for accounting students to think about practice, are his more long-term contributions. For this reason, it is prudent to suggest that current accounting academics – whether researchers or not – should be encouraged to read Zeff’s biography of Hatfield. Reading it reminds accounting teachers and researchers that their role is to support practice and practitioners by producing future accountants who can think and integrate research with practice. Zeff deserves to be congratulated for providing this opportunity to arrest the cur-rent decline in the relevance of accounting research and teach-ing. He also has our gratitude for demonstrating that biographical research in accounting history can inform a current debate on accounting issues.

REFERENCES

Bearman, P. S. (1993), Relations into Rhetorics: Local Elite Structure in Norfolk, England, 1540-1640 (New Brunswick, NJ: Rutgers University Press).
Carnegie, G. D., Parker, R. H. and Wigg, R. (2000), “The Life and Career of John Spence Ogilvy (1805-71), the First Chartered Accountant to Emigrate to Australia,” Accounting, Business & Financial History, Vol.10, No.3: 371-383.
Jordanova, L. (2000), History in Practice (London: Arnold).
Kitchen, J. and Parker, R. H. (1980), Accounting Thought and Education: Six English Pioneers (London: Institute of Chartered Accountants in England and Wales).
Lee, T. A. (2002), “The Contributions of Alexander Thomas Niven and John Ballantine Niven to the International History of Modern Public Accountancy,” Accounting and Business Research, Vol. 32, No. 2: 79-92.
Previts, G. J. and Merino, B. D. (1998), A History of Accountancy in the United States: The Cultural Significance of Accounting (Columbus, OH: Ohio State University Press).
Stewart, J. C. (1977), Pioneers of a Profession: Chartered Accountants to 1879 (Edinburgh: Institute of Chartered Accountants of Scotland).
Urban, M. (2001), The Man Who Broke Napoleon’s Codes: the Story of George Scovell (London: Faber & Faber).
Zeff, S. A. (1999), Henry Rand Hatfield: Humanist, Scholar, and Accounting Edu-cator (Stamford, CN: JAI Press).