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ACCOUNTING HISTORY AND ACCOUNTING PROGRESS

Christopher J. Napier

University of Southampton

Correspondence Address: School of Management University of Southampton Highfield

Southampton SO17 1BJ

United Kingdom

Telephone: +44(0) 23 8059 5318

Fax: +44(0) 23 8059 3844

E-mail: cjn@socsci.soton.ac.uk

Paper presented at the Second Accounting History International Conference,

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ACCOUNTING HISTORY AND ACCOUNTING PROGRESS

ABSTRACT

A. C. Littleton famously described accounting as “relative and progressive”. However, in recent historical accounting research, there has been increasing hesitation in describing accounting as “progressing”. This is largely because “progress” implies a degree not only of change but also of improvement, and historical accounting researchers, influenced by social science conventions, often regard describing accounting changes in terms of progress as involving improper value judgements. As accounting becomes an object of study less as a technical and more as a social phenomenon, consensus as to what constitutes an improvement becomes harder to secure.

Within so-called “traditional” historical accounting research, use of a progressive narrative framework is not uncommon, although writers often describe accounting change as “evolution”. This term has multiple meanings and connotations, ranging from a simple view of slow and gradual change to a teleological view of history tending towards some ultimate end or goal. In some interpretations, evolution is seen as inherently progressive, while in others no claim to progress is made. In assessing the work of historical accounting researchers, care is necessary to ensure that their use of models of evolution or progress is accurately understood.

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ACCOUNTING HISTORY AND ACCOUNTING PROGRESS

INTRODUCTION

In his pioneering history Accounting Evolution to 1900, A. C.

Littleton describes accounting in the following terms:

Accounting is relative and progressive. The phenomena which form its subject matter are constantly changing. Older methods become less effective under altered conditions; earlier ideas become irrelevant in the face of new problems. Thus surrounding conditions generate fresh ideas and stimulate the ingenious to devise new methods. And as such ideas and methods prove successful they in turn begin to modify the surrounding conditions. The result we call progress. (Littleton 1933: 361)

Littleton is not particularly clear as to what he means by

“progress”, although he implies that it lies in the ability of

accounting to solve present-day problems. Littleton notes that

accounting has not been static, and points to the growth in

professional audits and the expansion of cost accounting as

evidence of how accounting helps to solve problems of business

planning and control. He claims to show how “accounting

originated in known circumstances in response to known needs; it

has evolved and grown in harmony with its surroundings; its

changes can be explained in terms of forces current at the time”

(Littleton 1933: 362). Littleton’s historiography is a dynamic

one: accounting “came from definite causes; it moves toward a

definite destiny” (Littleton 1933: 362).

For a long time, I have found this view of accounting change

a puzzling one. It seems to embody a teleology: a belief that

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accounting changes could be assessed by the extent to which they

work towards the ultimate end (they are in that sense

“progressive”) or move away from the end (they are in that sense

“regressive”). But even if we believe that accounting has some

ultimate end, what could it be? In my own studies of accounting’s

history, I have passed through various stages from an initial

idealism, ready to believe that accounting can and does change for

the better, to a more sceptical position, unsure whether it makes

sense to describe accounting as “progressive” and to talk of

“accounting progress” at all.

This paper is therefore an attempt to explore what might be

meant by describing accounting as “progressive”. I shall

undertake this exploration by considering what roles a notion of

progress might play in historical research more generally and

historical accounting research more particularly. This requires a

review of the extent to which accounting historians have in the

past appealed to notions of progress. Although there is some

evidence of the use of progress as an organising concept in

so-called “traditional accounting history”, it tends to be tied up

with the highly ambiguous notion of evolution. The emphasis

placed on evolution as a term describing accounting’s patterns of

change has been criticised by the so-called “new accounting

history” (Miller et al. 1991; Miller & Napier 1993), but, as

Keenan (1998) has pointed out, this criticism may itself be open

to question as presupposing a rather specific and potentially

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about describing accounting change as “progressive” probably owes

more to the fact that many historical accounting researchers

(particularly those working within the “new accounting history”

approach) come from social science backgrounds, where claims that

evidence reveals a pattern of improvement over time might be held

to be inappropriate value judgements. However, telling a story in

terms of progress is often an effective way of structuring a

small-scale historical narrative, whether we describe a “success”

in which accounting, or something affected by accounting, is held

to improve, or a “failure” from which we hope to learn lessons to

help us avoid mistakes in the future. On a larger scale, it

becomes more difficult to tell a story of progress, as we seem to

have to choose between the equally unattractive options of seeing

accounting as eternally changing in a generally improving

direction or as tending towards its end.

PROGRESS IN HISTORY AND HISTORY AS PROGRESS

A dictionary definition of progress is: “An advance to something

better or higher in development” (Chambers English Dictionary

1990: 1168). This definition brings out the two central aspects

of progress. First, it is a dynamic concept: a necessary

condition for progress is that there should be some change.

However, change is not a sufficient condition: the change must be

a change for the better. Progress can be seen as a process of

more-or-less continuous improvement, and may in addition be

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philosopher Robert Solomon (1995: 722) defines progress as

“improvement over time, especially the gradual perfection of

humanity”. A strong belief in progress is often seen as

characteristic of the eighteenth century Enlightenment in Europe,

exemplified by such writers as the Marquis de Condorcet, who in

the middle of the French Revolution set out his Sketch for a

Historical Picture of the Progress of the Human Mind (Condorcet

1955). An enlightenment view of history as universal progress was

expressed by Edward Gibbon in The Decline and Fall of the Roman

Empire, where he drew “the pleasing conclusion that every age of

the world has increased, and still increases, the real wealth, the

happiness, the knowledge, and perhaps the virtue, of the human

race” (quoted in Carr 1964: 111).1

As a philosophical idea, progress is particularly associated

with Kant and Hegel. In his essay “An Idea for a Universal

History from a Cosmopolitan Point of View”, written in 1784, Kant

proposed that:

The history of the human race as a whole can be regarded as the realisation of a hidden plan of nature to bring about an internally – and for this purpose also externally – perfect political constitution as the only possible state within which all natural capacities of mankind can be developed completely. (Quoted in Burns & Rayment-Pickard 2000: 55)

The view of Kant that humanity’s history is a movement towards

some ideal state was developed by Hegel, who saw progress as being

achieved through conflict between and within ideas and political

systems. These would fall apart through their internal

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dialectical process. Ultimately humanity would reach a form that

contained no internal contradictions: what many writers, most

notably Francis Fukuyama (1992), have referred to as “the end of

history”.

Hegel’s view of a “universal history” had many unattractive

features, as he considered that:

The History of the World occupies a higher ground than that on which morality has properly its position. . . . What the absolute aim of Spirit requires and accomplishes – what Providence sees – transcends the obligations and liability to imputation and the ascription of good or bad motives, which attach to individuality in virtue of its social relations. . . . Moral claims that are irrelevant must not be brought into collision with world-historical deeds and their accomplishment. (Hegel 1956: 66-67)

As filtered through Marx and then later both Fascism and

Communism, this philosophy that history overrode morality was to

provide a justification for many subsequent acts of brutality

(Fukuyama 1992: 69). However, the implication that progress was

inevitable was to appear in a more benign light in nineteenth

century Britain, where rapid social and economic change could be

made to seem less threatening by locating contemporary

developments within a broader narrative of progress and, as the

nineteenth century unfolded, a story of evolution.

Peter Bowler, in his study of the Victorians’ relationship

with the past The Invention of Progress (1989), notes how

narratives of evolution emerged not only in historical writings

but also in a wide range of contexts, and suggests that evolution

provided “a general progressive scheme designed to create order

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optimism about the present and the future. Much general

historical writing in the nineteenth century, at least in Britain,

reflected this optimism, seeing history as a gradual movement

towards contemporary British society, with past institutions and

practices being interpreted as primitive precursors of those found

in the more developed present. This approach to historical

writing was subsequently to be described by Herbert Butterfield

(1931) as “Whig History”. Historians would identify the

favourable factors that allowed Britain to develop in the

fortunate ways that it did, while social scientists could

elucidate the underlying laws of progress in society, which might

be expected to turn out to be a generalisation of the Whig

interpretation of history (Bowler 1989: 27).

After World War I, the optimism that had supported a general

notion of progress tended to be replaced by a more pessimistic

viewpoint. In his study The Idea of Progress, first published in

1920, J. B. Bury tried to uphold the value of progress as “the

animating and controlling idea of western civilisation” (Bury

1920: viii), but could not entirely sustain an optimistic outlook.

Oswald Spengler’s The Decline of the West (1926) saw in human

history not a continuous trend of improvement but rather a

recurrence of cycles of growth and decay. Civilisations had a

“beginning”, a “middle” and an “end”. While there are echoes here

of Hegel’s dialectic, to Spengler it was less clear that the

succeeding civilisations embodied a pattern of constant

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example, the world of classical Greece and Rome with the age of

medieval Christianity or the European Enlightenment. Not only

could we expect any individual civilisation ultimately to decline,

but we would have no rational basis for considering its

replacement as better or worse than what went before.

This incommensurability of civilisations became particularly

significant as an argument against concepts of progress, as

historians and others became increasingly conscious of the danger

of ethnocentrism in the writing of “universal histories”. The

tendency of nineteenth century Whig history to take Victorian

Britain as normative, and the later tendency of so-called

“modernisation theory” (Nisbet 1969) to do the same for the USA in

the twentieth century, increasingly came under attack from those

who “questioned the very concept of modernity itself, in

particular whether all nations really wanted to adopt the West’s

liberal democratic principles, and whether there were not equally

valid cultural starting and end points” (Fukuyama 1992: 69). With

the growing influence of social science on historical research,

particularly research into cultural development, using concepts of

progress (and indeed of decline) was seen as requiring researchers

to make inappropriate value judgements as to what constituted

improvement or worsening. In a homogeneous culture, such

judgements would reflect a consensus and would not only go

unchallenged but most likely would not consciously appear to be

judgements at all. As cultures became more heterogeneous, the

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explicitly to embody a value judgement, which social scientists

increasingly wished to avoid making on methodological grounds.

Such value judgements, when not avoided entirely, became heavily

contested.

One area in which a concept of progress appeared to be still

viable was science. An important contribution to our

understanding of scientific progress is provided by the

philosopher of science Larry Laudan, in his book Progress and its

Problems (1977). Laudan argues that the adequacy of a scientific

theory or research programme lies in its ability to solve

scientific problems. If two theories are compared, one of which

solves more and “weightier” problems than the other, then the

first theory can be regarded as better than the second. Laudan

claims that:

Given that the aim of science is problem solving . . ., progress can occur if and only if the succession of scientific theories in any domain shows an increasing degree of problem solving effectiveness. (Laudan 1977: 68, italics in original deleted).

This focus on problem-solving might provide a way of

conceptualising progress in other disciplines and practices, and

arguably has already been reflected in historical studies of

accounting by Littleton (1933). Laudan notes that many

philosophers and historians of science have regarded science (in

actuality or as an ideal) as a cumulative system of knowledge.

This means that new theories are capable of solving not only the

problems solved satisfactorily by earlier theories but also a set

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(1962), who suggests that later theories can be incommensurable

with earlier theories. One aspect of this is that some at least

of the problems of earlier theories simply do not exist as

problems within the later theories, not in the sense that they are

solved by the later theories, but rather that they are

conceptually inexpressible in the terms of the later theories.

Laudan attempts to overcome this objection by claiming that

progress is not a matter simply of the number of problems solved

but also their significance or “weight” (presumably the previously

solved problems inexpressible in terms of the later theories are

simply not “weighty” enough to count in an assessment of the later

theories). This move may not be very satisfactory, but the idea

that theories (or indeed practices) can be assessed and compared

by their ability to fulfil adequately some function may be a

potentially promising one when we come to consider progress in

accounting.

The idea of progress has been an important feature of Western

historiography at least since the eighteenth century, although it

came to be questioned in the twentieth century both empirically,

given that civilisation was observed by some to be declining, and

methodologically, on the basis that judgements of progress

involved making unscientific (and thereby unacceptable) value

judgements. However, progress and its associated concept of

evolution have continued to be powerful narrative models for the

writing of history. In fact, as the philosopher of history Gordon

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progress can be understood has having a range of different

“shapes”. Graham identifies three versions of progress by

reference to what an “impartial observer” in the present would

believe about the past, and about whether or not the observer

would hold the same view at any time in the past. This

conceptualisation, by locating judgements at the level of

individual preferences, attempts to circumvent the objection that

progress is a value-laden concept. First, there is “uniform

progress”, where an observer in the present believes that, for any

time in the past, there is a later time when he or she would

prefer to live, and in addition the observer would have held this

judgement at any past time. Graham contrasts this with

“evolutionary progress”, where the observer in the present would

still believe that for any time in the past there is a later time

when he or she would prefer to live, but this view could not be

held at all points in the past. In a model of evolutionary

progress, the observer believes that recent history shows uniform

improvement, but in the past there have been episodes of growth

followed by decay. However, in each succeeding cycle of growth

and decay, the best position is an improvement on the best of the

previous cycle, and the worst position is also better than the

worst of the previous cycle. Finally, Graham describes

“revolutionary progress”, where instead of cycles of growth and

decay we have long periods of stasis followed by rapid improvement

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evolutionary progress as “the most plausible form of

progressivism” (Graham 1997: 63-66).

This raises the question of the connection between the

concepts of progress and evolution. The problem here is that the

term “evolution” covers a very broad spectrum of meanings.

Indeed, Keenan (1998: 652) suggests: “ ‘Evolutionary’ is an

adjective with a wide application and anything, perhaps, which

involves processes and outcomes could be so described.” At its

simplest, evolution may signal a process of gradual and continuous

change, in contrast to revolution. It is used in this sense by

Bromwich and Bhimani (1989), in their study of changing

developments in accounting inside organisations Management

Accounting: Evolution not Revolution. However, most users of

evolution in the context of accounting history are, as Littleton

(1933) was, interested in understanding change in a particular

domain as a response to changes in other domains. Here the

analogy with biological evolution begins to be drawn.

This analogy is taken further when the outcome of some

process of change is presented as a result of a variant of

“natural selection”. For example, a change in the economic

environment may give rise to new problems that call forth in some

way a range of possible solutions. The solution that ends up

predominating might be considered to do so through a process of

the “survival of the fittest”. At one level, this may be a

satisfactory explanation for the observed outcome. I would,

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simplistic evolutionary explanations along the lines that “the

fittest solution has survived” (what the American Accounting

Association (1977) has described as “Accounting Darwinism” – see

also Napier 1987: 244) but rather will wish to demonstrate how the

outcome actually is superior to its rivals. The assumption that

“what is observed is fittest” has been challenged recently by

Hoskin & Macve (2000: 105), who claim:

To say, as [economic rationalists] tend to, that the routines found in the archive mist have represented the optimal trade off of costs and benefits (given the decision-making and other uses that economic rationalists wish to attribute to such routines) is empirically empty and essentially tautological. What is still generally missing is an historical explanation for why particular routines and their subsequent modifications were the ones that were actually chosen and why consideration/experimentation was not given to possible alternatives that may have been even more cost-beneficial.

Analogies with biological evolution also become complex when

some goal or end to the evolutionary process is imputed. One of

the ways in which nineteenth century Christianity tried to

accommodate itself to the emerging biological theory of evolution

was to claim that evolution was simply the mechanism by which the

world was moving towards the completion of God’s plan (Ruse,

1999). The secular variant of this saw evolution as the mechanism

by which society progressed (Brewer, 1989). Evolution was broad

enough as a concept to accommodate a range of positions from

extreme laissez-faire (for example, the “social Darwinist” views

of Herbert Spencer and others) to more interventionist views such

as those of the Fabians and Progressivists. To some, evolution is

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teleological), to others, evolution is a force for unbounded

progress. This linking of evolution and progress was perhaps

influenced by Darwin’s ideas of “the Ascent of Man”: what appears

to be a path of improvement from simple organisms through

increasingly complex ones to the ultimate sentient organism.

However, it is by no means necessary to a theory of evolution

that it embodies any presupposition of increasing or decreasing

complexity. Indeed, most modern biological views of evolution

(see for example Smith 1993) tend to combine a “local” perspective

whereby species in particular environmental niches become dominant

because of particular adaptive advantages with a “global”

perspective whereby changes in the environment are expected to

lead to changes in the range and dominance of species in ways that

cannot be labelled simply as “progressive”. There is no reason to

expect an environmental change to lead to greater complexity in

the dominant species.

To sum up, progress has been a central theme in the writing

of history in the Western world for over two centuries. A wide

range of historians, from the Universal Historians such as Hegel

to the Whig Historians of nineteenth century Britain, saw history

itself as essentially progressive. History was written within a

narrative framework of progress, demonstrating how problems are

solved, challenges overcome and things get better. Metaphors of

evolution were often mobilised, although the equivocal nature of

the concept of evolution necessitates care in our interpretation

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however, a more pessimistic attitude to the world and to humanity

on the one hand, and a reluctance to make value judgements on the

other, have made the idea of progress less fashionable. It is now

necessary to see how the concept of progress and its more recent

questioning have had an impact on the writing of accounting

history and on our understandings of accounting more generally.

PROGRESS IN ACCOUNTING HISTORY

The relationship between accounting and progress raises many

important questions, and I do not have enough time to address all

of them in detail. The first of these is the empirical question

of how far, if at all, accounting itself is “progressive” in the

sense that properly functioning accounting contributes to the

improvement of society. Certainly many historians of accounting

have recognised – as does Littleton (1933) – that accounting

impacts on society, and an idealistic view of accounting is that

it has the potential of contributing to social improvement through

its embodiment of rational calculation. If we pay attention, as

did Max Weber among others, to “the ways in which particular forms

of calculation help to bring about the rationalisation of the

conduct of life in the sphere of the enterprise and more

generally” (Miller & Napier 1993: 635), and we see such

rationalisation as in itself progressive, then accounting, as a

form of rational calculation, has the potential to be progressive.

Of course, if we see the rationalisation of life as a bad thing,

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evidence of social improvement, and less likely to consider

accounting as a possible force for progress.

A second question is what might actually constitute progress

within accounting. Understanding progress as meaning change for

the better, this is certainly a central question that must be

addressed by the accounting profession and by both governmental

and non-governmental regulators of accounting. It arises

implicitly if not explicitly whenever a new or revised accounting

or auditing law or standard is proposed. What criteria can we use

to decide whether the new regulation is an improvement on the old

one, rather than simply being different? Similarly, both

academics and “practical” men and women want to satisfy themselves

that the technical innovations they develop actually represent

improvements on current ideas and practices. Perhaps such

innovators would endorse the view put forward by Laudan (1977)

that progress can be assessed in terms of ability to solve more

and weightier problems. Mobilising a problem-solving framework,

an accounting historian would need to ask at what point in time

does a particular problem emerge to which accounting might be a

solution.2 The pace of innovation in different times and places

could be explained in terms of the emergence at different points

of a given problem. For example, the need to account effectively

for business combinations emerges as a problem at an earlier time

in countries with highly developed capital markets such as the USA

and UK, than in countries where not only the way in which business

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enterprises is different. In the latter case, the “business

combination” may simply not exist as an object to be accounted

for.

In terms of technical progress, claims have been made that

accounting has been subject to periods of stagnation or even

decline. It would therefore not exhibit the pattern that Gordon

Graham (1997) referred to as “uniform progress”, with steady

improvement from period to period. Raymond de Roover (1955: 409)

described the period between the publication of Pacioli’s Summa,

the first printed treatment of double-entry bookkeeping, in 1494,

and the transition to more sophisticated corporate accounting in

the nineteenth century, as an “Age of Stagnation” (see also

Chatfield 1977: 52-61).3 Edwards (1988: vi), noting that “change

does not, of course, necessarily mean progress”, gives an example

of a relative decline in the quality of financial reports

published by British companies during the 1920s, as these tended

to disclose less than many financial reports published before

World War I.

The suggestion that accounting has declined has been

associated particularly with Johnson & Kaplan’s Relevance Lost

(1987). In fact, although these authors argue that management

accounting systems had become increasingly inadequate in the later

twentieth century, they interpret this “as a relatively recent

decline in relevance, not as a lag in adapting older financial

accounting systems to modern managerial needs” (Johnson & Kaplan

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the available technologies for accounting change – methods

developed in the manual or punch card era can be refined greatly

in the computer era – but also because the nature of the problem

for which accounting is the solution changes. Interestingly, this

view of decline in relevance incorporates a narrative of

technological progress. Both the “Age of Stagnation” argument and

the Relevance Lost position are capable of accommodating a

long-run view of progress, as stagnation did not last indefinitely,

while the diagnosis offered by Relevance Lost stimulated many

enterprises to make changes in their cost accounting and

management systems intended to remedy the decline in accounting’s

relevance (see Johnson 1992).

Furthermore, some historians have pointed to a tendency for

accounting changes to follow recurring patterns or cycles.

Mumford (1979) noted that the various stages in the growth and

decline in interest in price-change accounting in Britain over the

1970s reflected closely similar stages in an earlier cycle in the

late 1940s. He put forward his cyclical model “as a blueprint for

the next surge of inflation” (Mumford 1979: 98), and also in part

as a prediction (subsequently fulfilled) that, with the decline in

the rate of inflation, price-change accounting would disappear

from the agenda of accounting standard-setters, preparers and

users.

A cyclical model has also been proposed by Nobes (1991) for

UK standard-setting.4 Nobes specifically addresses the question as

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evidence of progress, defining this in terms of the ability of the

standard-setter to resolve conflicts, discover unique answers or

impose standard solutions (Nobes 1991: 271). It is worth noting

how by implication Nobes identifies progress in accounting with

the ability to solve problems, where solution is defined in terms

of obtaining “answers” or at least “consensus”. Nobes adopts a

rather Hegelian position by proposing that:

Progress may be inferred in the sense that the [standard-setting] structure contained the seeds of its own destruction . . . The inability of the Accounting Standards Committee to identify or to state or to enforce the “right” answer on various issues led to the pressure to replace it with a body that might be better able to manage some or all of these matters. (Nobes 1991: 271).

This illustrates a central problem with using a concept of

progress in historical explanation: if we focus on a relatively

short period of time we might observe a particular pattern of

change (improvement, stasis or decline), but this pattern need not

be the same as that observed over a longer period of time, within

which the shorter period is included. This situation is

consistent with the “evolutionary progress” model of Graham (1997)

already discussed, and it may underlie the relative lack of

explicit statements about progress in much of the traditional

writing on accounting history, as against the frequent references

to evolution.

However, the “evolutionary progress” model implies one major

belief: that, despite the possibility of setbacks in the past on

the road to the present, today’s observer believes that the

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points in the past. How far is it reasonable to impute such a

belief to traditional accounting historians using the term

“evolution” in their work? A relatively brief examination is

enough to show how several such historians say very little about

the current state of affairs at the time they were writing. Thus

Littleton, writing in 1933, brings his book to a close in 1900.

Garner, whose classic work Evolution of Cost Accounting to 1925

includes no fewer than nine chapters on the “evolution” of

particular features of costing, wrote in 1954. Lee & Parker,

whose collection The Evolution of Corporate Financial Reporting

was published in 1979, include some material touching on events

close to the date of publication, and their main motivation was

“inviting the reader to explore certain contemporary problems of

accounting through the eyes and pens of historians” (Lee & Parker

1979: viii). However, far from considering the present to be

“better” than most times in the past, they contend that “few of

the major issues of today are unique. In fact, . . . they are

often many decades old, and no nearer solution today than they

were when first mooted” (Lee & Parker 1979: viii).

Perhaps the most significant advocate of evolution as a

structure for thinking about accounting history was the American

Accounting Association’s Committee on Accounting History, which

reported in 1970. This proposed an objective for historical study

firmly in the tradition of “modernisation theory”:

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possible to suggest the practices and institutions which are more compatible with the environments of the developing world. (American Accounting Association 1970: 53)

Of nine specific “examples of historical studies which deserve

attention”, no fewer than eight contain the word “evolution”. But

despite this predominance of evolution, it is unclear whether the

Committee on Accounting History meant much more than “process of

change”, with some sense that changes in accounting may be a

function of changes in the environment. It is in this sense that

more recent historians seem to appeal to evolution. For example,

Jones and Aiken (1995), in their study of British company

legislation of the nineteenth century, argue that “analysis of

political and social evolution is . . . essential for explaining

the timing and development of companies legislation of this

period” (Jones & Aiken 1995: 61).5

Even if traditional accounting historians have been

circumspect about making claims that accounting has progressed,

this is how the new accounting historians have tended to

characterise their general approach. Thus Funnell (1998: 156)

defends new accounting history by claiming that “accounting

history is not the simple story of progressive improvement in

response to the emerging needs of society”. The view that

traditional accounting history was this simple story of progress

is evident from a number of the precursors of the new accounting

history. We can observe this view being expressed right from the

start by the central influence on the emergence of the new

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committee set up in 1977 by the British Social Science Research

Council to investigate research needs in accounting. One of the

main aims of this committee was to stimulate research that moved

away from what it perceived as “technical” towards a more socially

informed research agenda. The committee was greatly affected by a

perception that change was pervasive in accounting, that

accounting change was not well understood, and that, in principle

at least, an understanding of change could be given by historical

studies. However, despite a recognition of the substantial body

of historical research in accounting that, even in the mid-1970s,

had come into existence:

Most members of the committee nevertheless were dissatisfied with not only the present state of knowledge in the area but also the current directions of historical research. There has been a tendency for technical histories of accounting to be written in isolation of their social, economic and institutional contexts. Accounting seemingly has been abstracted from its social domain with many of the understandings that are available tending to present a view of the autonomous and unproblematic development of the technical. Where efforts have been made to offer alternative perspectives, teleological, evolutionary or progressive notions of change have often been implicit in the understandings presented. . . . [M]any members of the committee were concerned about the partial, atheoretical and intellectually isolated nature of much historical work in the accounting area. (Hopwood 1985: 365-366).

Similar views about traditional accounting history are put forward

by Hopwood in his later paper “The archaeology of accounting

systems” (1987), and by Miller & Napier in their paper

“Genealogies of calculation” (1993).

What is most noticeable about these criticisms of traditional

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examples of the “defects” that Hopwood and others claim to

identify. Probably the most articulated critique of traditional

historical writing is provided by Miller & Napier (1993), but this

is open to the objection that many of the examples of traditional

historical accounting research provided were rather dated, even at

the time the first version of their paper (Miller & Napier 1990)

was written. That Littleton in 1933 may have been rather

simplistic in drawing links between social and economic change on

the one hand and accounting change on the other, and vague on how

accounting fed back to help shape society, does not mean that all

traditional historians should be tarred with the same brush.

The key feature of the new accounting history, as stimulated

by Hopwood and developed by many others working within a wide

number of theoretical perspectives (see for example Miller et al.

1991), is that it is a sociological history written by social

scientists. Hence, it is driven by a desire to theorise and

generalise, rather than to particularise. At the same time, the

canons of social scientific research, in particular a nervousness

about appearing to make value judgements, have a significant

influence on the form of argumentation. This is paradoxical, as

many of the new accounting historians have felt distinctly unhappy

with what they perceive as the illegitimate dominance of

accounting in modern society. It has been argued forcefully by

commentators such as Neimark (1990, 1994) and Armstrong (1994)

that this has tended to lead to tensions if not contradictions in

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by the French social theorist Michel Foucault. New historians

wish to critique society, and accounting’s role within society,

while their theoretical standpoint tends to locate value

judgements as relative to beliefs and systems of power extant

during the period under study. This undermines the possibility of

the very critique that is being sought, as there is and can be no

independent standpoint from which any critique may be offered that

is immune to accusations that it simply reflects a particular set

of values. On the other hand, Foucauldians argue that a Marxist

theory of history appeals to Hegelian ideas of Universal History

that have long since been exploded.

Perhaps at this stage it is worth appealing to the archive

(Fleischman & Tyson, 1997). In an unpublished working paper6 that

formed the basis of thought on historical accounting research of

the 1977 Social Science Research Council committee discussed by

Hopwood (1985), Cyril Tomkins set out his view of the development

of accounting. This contains a remarkable echo of Littleton

(1933). “Developments in accounting came about in the first place

in response to economic social and political pressures, but,

thereafter, acted as an enabling device to assist further

developments” (Tomkins c.1978: 9, emphasis in original).

Moreover, it exhibits a degree of optimism that is often lacking

from the new accounting history:

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nineteenth and twentieth centuries and, more currently, the failure to produce acceptable inflation accounting rules and the lack of new methods to serve the special needs of developing countries where western (U.S.A. and U.K.) accounting practices are often of little direct relevance. However, if we take the broad span of history, accounting has on the whole developed as and when required. (Tomkins c.1978: 9, emphasis in original).

Interestingly, Fukuyama (1992: 70) suggests that the pessimism of

the twentieth century may have been overdone: “We need to ask

whether our pessimism is not becoming something of a pose, adopted

as lightly as was the optimism of the nineteenth century. For a

naïve optimist whose expectations are belied appears foolish,

while a pessimist proven wrong maintains an aura of profundity and

seriousness.” Is there scope for optimism about accounting, and

is it legitimate to tell histories of accounting progress? I

consider these issues in the concluding section of this paper.

NARRATIVES OF PROGRESS

Within the study of history more generally, one of the most

important debates in recent years has involved the consideration

of the extent to which the writing of history does more than

simply provide a “superstructure” (Goldstein 1976: 140-141)

necessary to express in words the objective facts of the past.

Indeed, does the way in which history is written – the “narrative”

of history – actually give meaning to the past (White 1987: 2)?

If the latter, is there one “correct” narrative already implicit

in past events, or is there the possibility of multiple

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has already examined this debate at some length, and what follows

is a very brief sketch of the issues. On one side, there is the

view that:

The historical method consists in investigating the documents in order to determine what is the true or most plausible story that can be told about the events of which they are evidence. A true narrative account . . . is a necessary result of a proper application of historical “method”. The form of the discourse, the narrative, adds nothing to the content of the representation. (White 1987: 27)

The role of the historian is to tell it “as it actually was”.

Historians may want to explain why events happened as they did by

appealing to some broader theory (and sociologically oriented

historians will inevitably wish to take this route), but the

historian’s explanations are separate from the historian’s

narratives. Indeed, historians face a tension: a “scientific” as

opposed to a “literary” approach to history seems to suggest that

putting the historical facts into a narrative framework could lead

to the danger of diluting objectivity. The aim of the historian,

on this view, is not to “tell a good story” (Napier 1989: 241),

but rather to tell the true story.

However, in recent years strong arguments have been put

forward, most notably by Hayden White, that the content and the

form of historical narrative are inseparable. Moreover, there is

no single true narrative: historical events can be ordered in a

narrative – “emplotted” – in different ways. In his seminal work

Metahistory, White proposes a series of standard emplotments7 that can be taken by historical narratives: romance, comedy, tragedy

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the world: “it is a drama of the triumph of good over evil, of

virtue over vice, of light over darkness, and of the ultimate

transcendence of man over the world” (White 1973: 9). In the

satire, whose principal style is irony, it is the world that

triumphs: “in the final analysis, human consciousness and will are

always inadequate to the task of overcoming definitively the dark

force of death, which is man’s unremitting enemy” (White 1973: 9).

Comedy and tragedy, on the other hand, hold out some hope of at

least provisional victory over the world, the difference being the

form that this victory takes. In comedy “hope is held out for the

temporary triumph of man over his world by the prospect of

occasional reconciliations of the forces at play in the social and

natural world”, while in tragedy “there are intimations of states

of division among men more terrible than . . . at the beginning.

Still, the fall of the protagonist and the shaking of the world he

inhabits . . . are not regarded as totally threatening to those

who survive . . . There has been a gain in consciousness for the

spectators” (White 1973: 9).

To White, the choice of emplotment for a historical narrative

is a choice of historical explanation. As the same set of

historical evidence is open, at least in principle, to different

emplotments, it can be explained in different ways. In a later

work, White links emplotment specifically to stories of progress:

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race was degenerating continually; and (3) the human race remained at the same general level of development continually. He called these three notions of historical development “eudaemonianism”, “terrorism” and “farce”, respectively; they might just as well be called comedy, tragedy, and irony (if considered from the standpoint of the plot structures they impose upon the historical panorama), or idealism, cynicism, and scepticism (if considered from the standpoint of the world-views they authorise) (White 1987: 65)

So a view of general progress is emplotted as comedy, one of

decline as tragedy and one of stasis or recurrence as satire.

Comedy and tragedy are common modes of emplotment in

traditional accounting history. Any narrative that begins with

the identification of some problem (whether this identification is

made by the author or is observed in the historical evidence),

sets out the various attempts at addressing the problem, and ends

with describing how the problem was solved, would be a comedy in

White’s terms. A classic example of this form of narrative is

given by Neil McKendrick’s study of Josiah Wedgwood’s cost

accounting (McKendrick 1970). Here, Wedgwood is faced with the

problem of falling profit margins in a time of economic decline,

which he addresses by experimenting with cost estimation

procedures. These turn out to be successful, and Wedgwood

persists with them. This is a clear story of progress. However,

when Hopwood tells the story of Wedgwood, the conclusion is more

equivocal: “Wedgwood now had available to him the basis of a more

anonymous and continuous form of surveillance. . . . The newly

established accounting system enabled a different set of dynamics

to be set into motion. . . . The organisation could be observed

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(Hopwood 1987: 218). There is a more ironic tone to this:

Wedgwood’s innovations may have solved one set of problems from

his personal point of view, but they change, not necessarily for

the better, how others in the organisation are affected by

organisation’s practices.

Traditional accounting histories may also adopt a mode of

tragedy, where an episode of failure is narrated as a “cautionary

tale” from which readers today (and indeed observers in the past)

might learn lessons. Arguably, the mode of emplotment in

Relevance Lost (Johnson & Kaplan 1987) is one of tragedy (even

though some of the “sub-plots” told along the way may in

themselves have the form of comedy). If American business is seen

as the protagonist of the story, then its persistence with costing

methods that were increasingly losing their relevance led, for

some organisations, to bankruptcy, and for others to serious

difficulty. There is, though, a hope that those reading the book

will draw lessons from it and change their costing methods to more

relevant ones. A satirical or ironic approach to narrating the

same events would rule out such hope.

If different emplotments of the same historical evidence are

possible, there is no single true historical explanation. Choice

of emplotment may reflect personal philosophy: as White points out

in the passage quoted earlier, there is an association between

comedy and idealism, tragedy and cynicism, and satire and

scepticism. If a sceptical attitude is regarded as the most

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surprising that the new accounting historians, reflecting such

scepticism, appear to find satire the most comfortable mode of

emplotment, and are uneasy with narratives of progress (or indeed

decay). This is well illustrated by the study by Peter Miller

(1991) of the British government’s advocacy of discounted cash

flow (DCF) as a means of increasing the rate of economic growth in

the 1960s. Miller is at pains to stress that issues such as the

extent to which DCF was actually adopted, and the extent to which

its use helped achieve the government’s objective of faster

economic growth, were not the point of his paper, which was to

study how a particular issue is “problematised” and how DCF was

mobilised in various programmes. As he concludes: “The ‘failure’

of the idealised programme within which DCF techniques was

promoted can be seen as intrinsic to the very nature of such

programmes” (Miller 1991: 738). In the final analysis, the world

always triumphs: the characteristic emplotment of satire.

As Berkofer (1995: 126) notes: “Progress as a way of

interpreting and emplotting history is both a methodology and a

moral outlook.” We have already seen how the influence of social

science on history has led to a reluctance to express a moral

outlook, but perhaps the time has come to be less nervous about

this. Naïve optimism may no longer be tenable, but unthinking

pessimism may be too bleak an outlook. The challenge is to

accommodate both an informed optimism and an informed pessimism as

acceptable positions, rather than leaving the arena entirely to

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accounting that make use of a progress emplotment, showing how the

environment gives rise to new problems, how individuals and groups

experiment with solutions, and how these solutions either succeed

(from the viewpoint of those developing them) or fail (allowing

lessons to be learnt), are just as valid as stories that claim not

to make judgements of success or failure. Alternative emplotments

are of course possible. It could be argued that Marxist

historical writings in accounting are tragic emplotments offered

as counterweights to comedic or progressive ones: accounting

serves capitalism, but only at the expense of the working class.

Making capital markets work better may be seen by some as a

successful outcome of reform in financial reporting, but making

capital markets work better may to others be simply an

exacerbation of exploitation. Once we give up the belief that

there is only one true narrative, we can accommodate a range of

different explanations and understandings of the same set of

historical evidence.

Progress narratives may be useful on the small scale, where

particular episodes are under consideration, but are they valid at

the level of the “grand narrative” of an overall history of

accounting? It is at this level that I begin to be more nervous

about whether such a “grand narrative”, if it could be written at

all, should reasonably take the form of a story of progress. If

we accept that accounting is a practice that aims to carry out

various functions efficiently and effectively, then it is only to

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compare from one point in time to another how well accounting

operates relative to these functions. If the functions of

accounting change dramatically from one period to another, then

such comparisons cannot be validly made. This is an evolutionary

world where, so long as the environment is relatively static, we

may hope to observe progress towards a better fit between

accounting and its environment (particularly as movement towards

such a better fit is helped by human agency rather than relying on

chance). However, once the environment changes significantly, it

no longer makes sense to talk of progress, as a degree of

incommensurability enters into the comparison. The borderline

between a relatively static and a significantly changing

environment is itself not self-evident, and there will doubtless

be cases where use of a progress motif will be problematic rather

than clearly acceptable or inappropriate.

So I would conclude that it is legitimate for accounting

historians to tell their stories in terms of progress when they

are working on a relatively small scale, so long as they recognise

that what is progress for some may be degeneration for others, and

what appears progressive at one point of time may not seem so with

the benefit of hindsight. It is certainly worth examining the

extent to which those involved in changing accounting (not only at

the level of national and international regulation but also within

organisations) attempt to mobilise rhetorics of progress and

improvement,8 and the extent to which these are taken for granted.

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is still appropriate, particularly where these involve

teleologies. We simply do not know whether the “end of

accounting” will be its glorification or apotheosis as the

dominant mode of economic calculation, or its literal end in

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NOTES

1

As Carr observes in a footnote, this passage appears in the context of a discussion of the collapse of the western Roman empire. Carr stresses that Gibbon was not being ironic in this paean to progress.

2

There is nothing necessary about the extent to which the formulation of a particular problem – its “problematisation” – and the ways in which solutions to the particular problem are pursued – “programmes” – admits or includes accounting (Miller, 1991). Why certain issues are seen at particular points in time as problems of accounting is a legitimate area of historical enquiry.

3

This has been derided as the “after Pacioli, nothing” theory of history by Zan (1994: 296).

4

The Nobes (1991) study has been criticised by Skerratt & Whittington (1992), who argue that the cyclical model is both underdetermined theoretically and non-descriptive empirically.

5

The approach of Jones & Aiken (1995) has been challenged by several writers, among them Maltby (1999), who asserts bluntly that “accounting does not ‘evolve’ ”.

6

A copy of this paper was provided to me by Anthony Hopwood in 1985.

7

These are borrowed from the work of the American literary theorist Northrop Frye (1957).

8

An issue addressed by Miller & O’Leary (1987), in their discussion of how projects of national efficienc y, aiming to improve the life of the individual, and through this the nation, involved innovations in human accounting through processes of standard costing.

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