DOCTORAL RESEARCH
Maureen Berry, Editor UNIVERSITY OF ILLINOIS
The theme running through this selection of dissertations has to do with various relationships between the state and the society it serves, or between different social groups, over time and in diverse settings.
Scardellato leads the way with his sketch of rural life in the Vale of Evesham: a scenic area long renowned for its market gardens. His analysis of the events which touched and shaped the lives of the villagers spans the closing centuries of the Middle Ages. The political turbulence of those times drew most communities into con-flicts and Evesham was no exception. In 1265, the mighty Simon de Montfort was defeated and killed thereafter bringing about the most important event in Parliamentary history. Not only had he called on the knights from each shire to represent the rural nobility but, for the first time, representatives were summoned from the towns and boroughs. Scardellato’s concern with the peasants of England’s emerging democracy contrasts with Munktell’s picture of what was happening then in rural Sweden: this time, however, from the much more advantageous position of the landlords.
Some 50 years before his chronicle starts, Sweden, Norway, and Denmark had been united by Queen Margaret. An independent feudal class was already well established, Swedish cities had started to achieve some measure of autonomy, and the Hanseatic League was significantly influencing trading. Munktell outlines the trading activities of the land-based nobility, as well as the main functions of their manors, and traces the role of these estates as bases of economic power.
Four centuries later, the French establishment, which had already gone through a series of giant upheavals, was shaken again by the challenge of citizens’ rights to state prerogatives. Owen takes us to the France of the belle époque, when, in the wake of the Franco-Prussian war and the Dreyfus case, an anti-clerical and pacifist socialist movement came to political power. With patriotism running high, nationalism and internationalism squared off over the issue of income taxation, and the private purse apparently triumphed. The critical factor, as Owen sees it, was the French gov-ernment’s need to achieve political alignments in order to put through policy programs. This philosophy, of course, steers Western Europe today, taking the form of the European Economic Community (EEC).
The first step in the creation of the EEC came with the formation of the European Coal and Steel Community (ECSC) in 1952. The then six members of the EEC agreed to pool their coal and steel resources and further the free movement of people and products within the community by providing a unified market for coal and steel, lifting import and export restrictions and creating a unified labor market. In its first decade, which constitutes most of the period studied by Pieters, the ECSC achieved highly successful economic results. Its iron and steel production rose by 75 percent, with other industrial production not far behind. In the 1960s, when overproduction started to become a problem, the ECSC provided resources, particularly to Belgium, to help with miner retraining and new industry development. How this new economic order helped other workers in the community, in particularly the Dutch miners, is Pieter’s main research question.
We move on from the concerns of the workers to the concerns of the investor with the first of three dissertations dealing with information needs for resource allocation decisions. Korhonen draws us back to the Scandinavian community with his investigation of the Finnish stock market. Taken as a whole, the eleven papers of his dissertation paint a brighter picture of market efficiency than had generally been supposed.
Investor information also ranks high on Rees’s list of priorities. He, however, is working in the public sector, looking at footnote reporting by cities. Ormsby keeps us in the financial reporting arena with a very interesting study of by-product accounting. Ferioli completes our survey by bringing us back to the individual. Just what does it take, he asks, to pass the CMA exam?
Medieval Records of Ombersley Manor (Rentals and Court Rolls, 1300-1500) (The University of British Columbia, 1983; Vol. 44/05, p. 1540-A)1 by Gabriele Pietro Scardellato. Village life in England during the Middle Ages has attracted much scholarly attention and its history has generally been pieced together from the rental records of the lords of the manors. These documents chronicle the rights and obligations of the tenants, as well as other legal transactions which provide clues about the lives of the villagers, such as fines and changes in tenancies. The wealth of detail contained in these records attests to their importance for studying various aspects of manorial life, particularly if there is interest in population trends or land distribution. However, Scardellato questions the reliability of referring to rental rolls in isolation because of their static character and the fact that they are unidimensional, that is, they only reflect the concerns of the landed gentry. He feels that, instead, groups of records should be explored. Following this argument, his dissertation attempted to reconstruct medieval English rural conditions, using an assortment of manorial records which span the fourteenth and fifteenth centuries. By examining account rolls, court, and rental records in combination, he traced the activities of a number of individuals and families living in Ombersley, a manor which belonged to the Benedictine abbey of Evesham in Worcestershire. From this examination of interrelated sources, Scardellato was able to summarize the major economic and demographic trends during that period. These included economic development as reflected in the various dues paid, as well as estimates of the manor’s population, reproductive capacity, and mortality rate. Although these records were not complete, they provided ample material for a planned monograph on social stratification, as well as other aspects of Ombersley’s history.
Gods, Godsagare Och Landbor 1450-1520: Studier i de senmedel-tida fralsegodsens funktion (Estates, Estate Holders and Tenants 1450-1520. Studies in the Function of the Estates Belonging to the Nobility). (University of Gothenburg, Sweden, 1982; Vol. 44/01, p. 57-C) by I. M. Munktell. This study examines the role of estates owned by the nobility and landed gentry in Sweden during the period 1450-1520, concentrating on seven large areas located in Uppland, Sodermanland, Ostergotland, Smaland, and Vastergot-land. Two related issues were analyzed: the estates’ function as economic bases for the power of the nobility in society, and the economic significance of estate management and tenant systems on a local basis. Most of the data was drawn from accounting records. However, other main sources included relevant statutes, deeds, and surveys.
The thesis was organized into seven chapters, dealing with five main topics of interest: the economic patterns underlying new estate formation during the late Middle Ages; the size and functions of the estates; the relationships between estate owners and peasants; the pattern of trade carried out by the nobility; and investments by the nobility other than in land. Munktell found that the higher nobility acquired land either by exchanges among themselves or by purchase from the lower nobility. Estate formation during this period was concentrated in manors and locations with good communications, particular by water. In addition to land, nobles also acquired houses and interests in mills. They also invested in improvements and building maintenance.
The manors had three main functions, serving as housing, admin-istrative centers, and large working areas. Many of these were important agricultural sites, employing on the average from 30 to 50 permanent agricultural workers. These features accorded the manors a significant amount of local importance, together with the fact that they were also centers for rent collections. Rents were collected by bailiffs, or by heads of county constabularies, either in money or in kind. In the latter case, grain and butter were the most important trading commodities. Estate management in those days can best be described as flexible, in that it was primitive in comparison with the rational management methods which prevailed in the following century.
Study of the statutes showed that the landowners attempted to bind their employees both to themselves and to the estates. How-ever, it appeared from analyzing the surveys and the accounts that these efforts were seldom successful. Legal rights had to give way to economic considerations. As a result, the lot of the peasants probably did not deteriorate during the late Middle Ages. The estate produce was used for both local and external trading. Externafly, trading was well organized with a system of permanent business contracts. As for purchases, these mostly consisted of necessities such as salt and cloth. However, luxury items, including spices and wines, were also in demand.
The Politics of Tax Reform in France, 1906-1926 (University of Cali-fornia, Berkeley, 1982; Vol. 43/08, p. 2761-A) by Stephen Walker Owen. Owen’s interest in state-society relationships led him to explore the nature of the French Third Republic by examining the French tax reforms at the beginning of this century. The government’s proposals to introduce an income tax in place of the then existing regressive tax system met with almost universal opposition. The upper classes interpreted this move as incipient socialism, threatening private property rights. Their fears were shared to some extent by the peasants and shopkeepers who, however, were more concerned about the possibility of tax assessors delving into their personal and financial affairs.
In addition to public antagonism, the tax reform movement also had to contend with the organization of political parties which necessitated accommodations and alignments on major issues. Consequently, taxation reform could not be brought forward in isolation. After the onset of World War I, the government successfully put through diluted versions of its income taxation plans in 1914 and 1917 to help finance the war effort. However, it later chose to impose a sales tax, rather than strengthen income taxation, when facing financial difficulties in 1920. Neither of these measures proved adequate to stave off the financial crisis of 1924-26.
In Owen’s view, the pattern of tax reform in France during this period suggests that the French state and political system could not be neatly classified into one or the other of two contrasting models: pluralist or marxist. That is, there was neither equal competition among interest groups nor direct capitalist control. According to the historical evidence, there was no general agreement in French society about restraining social and economic innovations. There was, however, little if any disagreement about the need to defend the taxpayer against state authority. This unity worked to protect not only the wealthy but also the other main social groups. This study also highlighted the key role which political accommodations played in fiscal matters: particularly during the decade which preceded the war. Although the French state enjoyed considerable autonomy, it was curbed by the nature of French society as well as its economic environment.
Lonen en Bedrijfsresultaten bij de Nederlandse steenkolenmijnon-dernemingen in de Gemeenschappelijke Steenkolemarkt van de E.G.K.S. (Wages and Profits/Losses in the Dutch Coal Mines in the Common Coal Market of the European Coal and Steel Community) (Erasmus University, Rotterdam, Holland, 1981; Vol. 44/02, p. 293-C) by J. M. G. Pieters. The main purpose of this dissertation was to investigate whether working conditions and living standards for Dutch workers were improved as a result of the integration of the Dutch coal mines into the common market of the European Coal and Steel Community (ECSC).
158 The Accounting Historians Journal, Spring, 1985
The establishment of the ECSC constituted one of the major inte-gration processes of the Community and European economic devel-opment. The setting up of a supranational authority over the coal and steel industry was not only a defensive move to guard against the possible domination of a basic industry by individual aggressor nations. It was also anticipated that production efficiency would be improved as a result of keener competition in larger markets. This would in turn forward the prosperity of member countries and improve the lot of workers through increases in their rewards. Whether or not this held true for Dutch workers was the main research question.
The study encompassed the time period from the early 1950s, when the 1954 statute for the coal mines went into effect, until 1965 when the Dutch government announced that coal mining was to be abandoned. The Dutch mines produced industrial and house coal with heterogeneous quantities, qualities, and markets. While de-mand for house coal remained relatively stable, industrial coal was gradually replaced by cheaper and cleaner fuel oil. This fuel sub-stitution could have been one of the main factors contributing to the considerable differences in operating costs between the mines. However, it is also possible that operating cost variations could have been attributable to the differing extraction technologies. This could not be analyzed, however, due to the lack of data.
Despite the fact that improvement in workers’ pay and other benefits were supposed to be linked to the common market success of the enterprise they worked for, a general levelling process took place. Working conditions, including bonuses paid on operating profits, were harmonized and equalized on a progressive basis for the workers in the various enterprises. Any efforts which the trade unions might have been able to make in demanding that working conditions be related to specific enterprises were frustrated by lack of information. Further, the unions themselves did not seem to have a clear notion of the ECSC Treaty’s objectives.
In Pieters’ view, the labor unions had to bear most of the blame for this situation. When the coal mine statute was being considered initially, the government apparently favored worker participation in the economic management of the mines. This would have given the unions the right to obtain whatever information they wanted. However, they turned down the joint management proposals and appeared to be satisfied with the minimal information requirements which were subsequently incorporated into the statute.
Stock Prices, Information and the Efficiency of the Finnish Stock Market: Empirical Tests (Helsingin Kauppakorkeakoulu, Finland, 1977; Vol. 44/01, p. 53-C) by A. O. Korhonen. This study is organized into three main parts and consists of eleven papers which discuss various aspects of stock market efficiency in Finland. Here, an efficient market is defined as one in which prices at any time fully reflect all available information. Eighteen companies included in the Helsinki Stock Exchange’s Unitas index constituted the data base, and the period involved ran from 1960 to 1971.
The first part of the dissertation contains four papers which have to do with the information content of past prices or returns on in-vestment. In most cases, tests of the dependence of successive price changes yielded results consistent with market efficiency. In the second part, four additional papers deal with stock price adjustments to publicly-disclosed information. Such sources included stock dividend announcements, accounting-determined income, dividend announcements, new stock offerings, mergers, and divestitures. The test results showed that the efficient market hypothesis was not supported with respect to stock dividends. In the case of accounting income, however, the findings that the market seemed to adjust in advance of official earnings announcements were consistent with the market model. No price reaction was observed in connection with dividends, and there was only a weak relationship between dividends and future earnings. Finally, while an initial over-reaction to announcements of impending new stock offerings was identified, stock prices at the time of new stock issues, mergers, or divestitures apparently already reflected all the related anticipated gains.
In the closing section, three papers look at stock pricing. Tests are reported of a two-parameter asset pricing model, in addition to additional evidence as to the behavior of the beta risk parameter. The results conflict somewhat, but they seem to suggest that market efficiency showed improvement over a period of time.
User-Oriented Municipal Footnote Reporting Models: Ideal and Practical (Texas Tech University, 1982; Vol. 43/08, p. 2713-A) by David Arden Rees. Rees’s inquiry into footnote reporting by local governments is divided into four main areas: the history of the topic, analysis of the footnotes in selected financial statements, so-licitation of informed opinion, and development of footnote reporting models.
The author first traced the evolution of municipal financial reporting from the late nineteenth century until 1982. Perhaps surprisingly, he found that the use of footnotes is a relatively recent phenomenon. Footnoting was first mentioned in the authoritative literature in 1968, but there has been little official guidance as to the type of information which should be disclosed in this way.
In order to assess the current state of the art, as well as the degree to which practices can be considered comparable, Rees analyzed the financial statements of selected cities with populations exceeding 100,000. This review showed that there are many shortcomings in footnote reporting practices. Also, that there was little comparability in either form or content. To test these impressions, he mailed out questionnaires to certain informed user groups: academicians, auditors, bankers, municipal finance directors, and underwriters. They were asked for their opinions about the importance of selected items of information as well as the perceived adequacy of footnote disclosures of these items. Unfortunately, the responses contained little if any consensus as to the first item and no agreement on the second. However, this feedback did not go for naught. Based on the replies from the bankers and underwriters about the perceived importance of particular items of information, Rees designed a conceptual model. He divided the items into four groups, based on their perceived relative importance, and then developed footnote reporting guidelines for each group, together with application examples for similar information. Because of the differences between this conceptual approach and current authoritative requirements, Rees also designed a pragmatic model, for more immediate application, which combined certain currently required footnote reporting practices into some features of the conceptual model.
By-Product Accounting in the Extractive Industries: A History and Survey of Current Practice (University of Arkansas, 1982; Vol. 43/10, p. 3353-A) by Susan Young Ormsby. Accounting research has hitherto paid scant attention to the topic of by-products, despite their revenue-generating potential. Neither is there much guidance in the literature to assist the accounting and reporting-related decisions of companies which produce joint or by-products. Ormsby’s dissertation is aimed at filling these gaps.
There are two main parts to the thesis. First, the author traced the history of accounting for by-products. Next, she conducted a mail and telephone survey, contacting 190 respondents in the following extractive industries: coal, forestry, metal, mineral, and oil and gas. Her main areas of interest had to do with the accounting methods the firms used, why these methods had been chosen, how the firms determined the feasibility of alternative processing, as well as marketing, methods for by-products, and how they determined that by-products had become major products.
Ormsby found that the existing diversity of accounting methods can be attributed to the fact that there is no clear-cut definition of a by-product. Based on the sample responses, all the various accounting methods catalogued in the historical survey were found to be currently in use, and were mainly chosen because they were simple to apply, had been recommended by members of the accounting profession, or had seemed appropriate in view of the vol-ume of by-product sales. Generally speaking, alternate processing methods or markets had been suggested by the firms’ marketing departments and were evaluated by relatively sophisticated tech-niques. Little support was found for the a priori assumption that many by-products do, in fact, become major products.
The author concluded that by-products need to be more specifically defined, and the accounting community needs increased awareness of the potential for associating revenues with by-products. More complete accounting procedures should be devised that will help decision-making by improving the recording and reporting process, as well as the tracking of information.
A Study of Selected Factors Contributing to the Acquisition of the Certificate in Management Accounting (New York University, 1983; Vol. 44/02, pp. 558-9/A) by Joseph Warren Ferioli. This study addressed itself to determining and analyzing certain factors which could have a bearing on a candidate’s ability to obtain the Certificate in Management Accounting (CMA). In the United States, the CMA is recognized as one of the hallmarks of the professional management accountant. To obtain the certificate, a candidate must pass a nationally-administered five-part examination, as well as complete two years of related experience within a specified time period.
Using a table of random digits, Ferioli selected a sample of 616 candidates who passed the CMA examinations during the period 1976 through 1980. He then mailed them questionnaires, requesting information about a number of items of interest including age, education, personal feelings of prestige and satisfaction, sex, and work experience. A total of 367 usable responses were received. Descriptive statistics, frequency distributions, and Pearson r correlations constituted the bases for data analysis, and they were processed with the use of the Statistical Package for the Social Sciences (SPSS) program.
Ferioli found that women had a higher pass rate on the first attempt than men and also successfully completed previously failed parts of the examination in a shorter period of time. Generally, women who did not pass all five parts on the first attempt made up their deficiencies on the second or third try. Age seemed to play a part in the success rate for men. Those over the average age of 33 had more difficulty in passing on the first attempt and had to retake failed portions perhaps as many as five times. He also found a significant positive correlation between examination success and possession of a graduate degree in business. In addition to other results which might prove useful for those planning to take the CMA examination, the author also suggests a curriculum aimed at increasing the passing rate.
