accounting progress
CChhrriissttoopphheerr JJ.. NNaappiieerr University of Southampton
A Abbssttrraacctt
The “new” accounting historians that emerged from the mid-1980s characterised their predecessors as relying heavily on a view of accounting as progressive and accounting change as evolutionary. From a social science perspective, progress is a problematic concept, as it implies not just change but also improvement, and thus seems to imply the making of a value judgement. As accounting has become 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. However, from a perspective grounded in historiography, this paper reviews the use of a concept of progress in the writing of history from the eighteenth century, and analyses its use, together with that of a concept of evolution, in “traditional” accounting history. Appealing to recent developments in the understanding of the role of narrative in history, the paper suggests that the use of narratives of accounting progress should not be ruled out on a priori grounds.
K
Acknowledgements:An earlier version of this paper was presented as a plenary address at the second Accounting HistoryInternational Conference, Osaka, Japan, 8-10 August 2001, and the author would like to thank those attending the conference for their valuable comments. The author is grateful to Garry Carnegie and an anonymous reviewer for detailed suggestions for improvement; any remaining errors remain his own responsibility.
Address for correspondence:
Christopher J. Napier School of Management University of Southampton Highfield
Southampton SO17 1BJ United Kingdom
11.. IInnttrroodduuccttiioonn
Anthony Hopwood, in his critique of historical accounting research “The Archaeology of Accounting Systems” (1987), characterised most of the historical studies in the field published by the mid-1980s as having “adopted a rather technical perspective delineating the residues of the accounting past rather than more actively probing into the underlying processes and forces at work” (Hopwood, 1987, p.207). As Hopwood perceives it, “accounting has more frequently been seen as becoming what it should be. A teleological trajectory of development has provided a basis for understanding changes in the accounting craft. ... [A] relatively unproblematic progressive and functionalist interest has been imposed all too readily on the residues of the accounting past” (Hopwood, 1987, p.206).
Although Hopwood gives few specific references to justify this criticism, a progressivist tendency can indeed be detected in central works of historical accounting research. For example, 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, p.361).
Littleton does not make specific 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 emerging 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, p.362). Littleton’s historiography is a dynamic one: accounting “came from definite causes; it moves toward a definite destiny” (Littleton, 1933, p.362).
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 associated 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). As Keenan (1998) has pointed out, this criticism may itself be open to question as presupposing a rather specific and potentially confused understanding of the concept of evolution. Nervousness about describing accounting change as “progressive” may owe 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.
face a choice between the equally unattractive options of regarding accounting as eternally changing in a generally improving direction or as tending towards its end.
P
Prrooggrreessss iinn hhiissttoorryy aanndd hhiissttoorryy aass pprrooggrreessss
A dictionary definition of progress is: “An advance to something better or higher in development” (Chambers English Dictionary, 1990, p.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 regarded as progress towards some goal or end. Thus the philosopher Robert Solomon (1995, p.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. This is 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, p.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 and Rayment-Pickard, 2000, p.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 contradictions and be replaced by higher forms through a 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:
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, pp.66-7).
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, p.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.
In his study of the Victorians’ relationship with the past, The Invention of Progress (1989), Bowler 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 out of chaos” (Bowler, 1989, p.5). Belief in progress was a badge of 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, p.27).
The argument that different civilisations could not be ranked meaningfully undermined the use of a concept of progress at a time when historians and others began to realise 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, p.69). As social science came to have an increasing influence on historical research, particularly research into cultural development, the use of a concept of progress (and indeed a concept 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 have reflected a consensus and would not only have gone unchallenged but most likely would not consciously appear to be judgements at all. As cultures became more heterogeneous, the description of a particular change as progressive appeared 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, p.68, italics in original deleted).
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. On the other hand, the link between progress and functionalism in accounting history was precisely what was criticised by Hopwood (1987, p.206).
Graham’s shapes of progress directly raise 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, p.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. This seems to be an important feature of Graham’s argument. In the accounting literature, evolution 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, however, suggest that historians will not be satisfied with 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, p.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 and Macve (2000, p.105), who claim:
To say, as [economic rationalists] tend to, that the routines found in the archive must 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.
of Herbert Spencer and others) to more interventionist views such as those of the Fabians and Progressivists. To some, evolution is seen as driving the world towards some desired end point (it is 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 Descent 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, many 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 of how contemporaries used the term. In the twentieth century, 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.
P
Prrooggrreessss iinn aaccccoouunnttiinngg hhiissttoorryy
sphere of the enterprise and more generally” (Miller & Napier, 1993, p.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, then we will be less likely to regard the spread of accounting as evidence of social improvement, and less likely to consider accounting as a possible force for progress. Whatever our position, the criticism of commentators such as Hopwood (1987) is that traditional historians took accounting as unproblematically representing a potential for technical improvement. Broadbent and Guthrie (1992) have described this view in the context of research into present-day accounting practice as “technical accounting”. They refer explicitly to Hopwood (1987) when they state that, under this view, “changes to accounting systems are seen as being progressive and reforms to accounting practices are based on the notion of teleological trajectory. Changes in practice are therefore seen as being manifestations of functional progress and system improvements” (Broadbent & Guthrie, 1992, p.10).
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. To some, progress in accounting was equated with accounting’s becoming more scientific, not in the sense that theories used to understand and explain accounting appealed to scientific analogies, as did positive accounting theory (Watts & Zimmerman, 1986, p.2), but rather in the sense that accounting measurements would be claimed as conforming to the canons of objectivity and realism (Chambers, 1966; Sterling, 1979). 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.2The pace of innovation in different times and places could be explained,
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 Graham (1997) referred to as “uniform progress”, with steady improvement from period to period. Raymond de Roover (1955, p.409) contemptuously dismissed 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, pp.52-61).3Edwards (1988, p.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 in recent years with Johnson and 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, 1987, p.xii). Accounting methods become obsolescent partly because of changes in the available technologies for accounting – methods developed in the manual or punch card era can be refined greatly in the computer era – but also because of changes in the nature of the problem for which accounting is the proposed solution. 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 Loststimulated many enterprises to make changes in their cost accounting and management systems intended to remedy the decline in accounting’s relevance (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, p.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.
standards in the 1970s and 1980s provided 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, p.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, p.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 current state of affairs is preferable to that at most if not all 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 1925includes no fewer than nine chapters on the “evolution” of particular features of costing, wrote in 1954. Lee and Parker, whose collection The Evolution of Corporate Financial Reportingwas 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, p.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, p.viii).
By observing the evolution of accounting thought, practices, and institutions that has corresponded to evolution in the environment (including economic, social, political, and legal factors), it may be possible to suggest the practices and institutions which are more compatible with the environments of the developing world (American Accounting Association, 1970, p.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, p.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, p.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 accounting history, Anthony Hopwood. He was a member of a 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 at least a partial 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:
concerned about the partial, atheoretical and intellectually isolated nature of much historical work in the accounting area (Hopwood, 1985, pp.365-6).
This view of traditional accounting history not only motivated Hopwood in his own substantive historical researches (Hopwood, 1987), but was proposed by Miller and Napier in their paper “Genealogies of Calculation” (1993). The latter paper is open to the objection that many of the examples of traditional historical accounting research that it criticised were rather dated, even at the time the first version of the 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 have similar views attributed to them.
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 gives rise to a potential paradox, as some of the new accounting historians, while documenting the expansion of accounting and accountants (and related disciplines such as auditing) into new contexts and domains, have felt distinctly unhappy with what they perceive as the confining rather than liberating impact of accounting on modern society. It has been argued forcefully by commentators such as Neimark (1990, 1994) and Armstrong (1994) that the methodological inhibition from making explicit value judgements has tended to lead to tensions if not contradictions in much of the new accounting history, particularly that influenced 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 paper6that formed the basis of thought
social and political pressures, but, thereafter, acted as an enabling device to assist further developments” (Tomkins, 1978, p.9, emphasis in original). Moreover, Tomkins exhibits a degree of optimism that is often lacking from the new accounting history:
Despite the current criticisms, the long run record of accounting is distinctly encouraging. There have been occasions when accountants may not have reacted quickly enough to the needs of the day’s society – for example the very slow pace (and sometimes backward steps) of increasing disclosure of information through the 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 (USA and UK) 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, 1978, p.9, emphasis in original).
Interestingly, Fukuyama (1992, p.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? These issues will be considered in the concluding section of this paper, which develops the theme of history as narrative and hence importantly literaryrather than simply a neutral piece of science.
N
Naarrrraattiivveess ooff pprrooggrreessss
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, pp.140-1) 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, p.2)? If the latter, is there one “correct” narrative already implicit in past events, or is there the possibility of multiple narratives, and thus multiple meanings? Within the accounting literature, Funnell (1998) has already examined this debate at some length,7and what follows is a very brief sketch of the
issues. On one side, there is the view that:
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, p.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 emplotments8that can be taken by
historical narratives: romance, comedy, tragedy and satire. In the romance, the hero of the story triumphs over 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, p.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, p.9). Comedy and tragedy, on the other hand, offer 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, p.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:
the historical panorama), or idealism, cynicism, and scepticism (if considered from the standpoint of the world-views they authorise) (White, 1987, p.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 and managed in terms different from those in which it functioned” (Hopwood, 1987, p.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 the new 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.9 A satirical or ironic approach to
narrating the same events would rule out such hope.
emplotment, and are uneasy with narratives of progress (or indeed decay).10This is
well illustrated by the study by 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, p.738). In the final analysis, the world always triumphs: the characteristic emplotment of satire or irony.
As Berkofer (1995, p.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 the morally evasive ironists of social science. Narratives of 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 historiesas narratives that claim not to make judgements of success or failure. Alternative emplotments of the “same” facts or events 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.11Making capital markets work better may be seen by
some as a successful outcome of reform in financial reporting, but to others may 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.
accounting operates relative to these functions. If the functions and domains of accounting change dramatically from one period to another, then such comparisons cannot be validly made. This view of the world of accounting could be characterised as an evolutionary one 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, particularly where specific forms of accounting are being introduced into hitherto uncolonised domains, and there will doubtless be cases where use of a progress motif will be problematic rather than clearly acceptable or inappropriate.
C
Coonncclluussiioonn
My argument leads to the conclusion 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. In terms of such “microhistories” (Williams, 1999), the historian may wish to emplot the historical narrative in ways that encourage readers to learn lessons from the past, although perhaps more appropriately we should consider the lessons those of the particular historian, rather than already there “in history” (Jenkins, 1999). Hence accounting history will still have a place for stories, within many different arenas and genres, of “success” or “gallant failure” (Carnegie & Napier, 1996, p.30), although perhaps with greater self-consciousness on the part of their authors of the equivocal nature of the histories they narrate.
At the “macro” level, it is certainly worth examining the extent to which those involved in changing accounting (not only at through national and international regulation but also within organisations) attempt to mobilise rhetorics of progress and improvement,12and the extent to which such rhetorics do not need to be drawn
N Nootteess
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 accountingis a legitimate area of historical enquiry.
3. This has been derided as the “after Pacioli, nothing” theory of history by Zan (1994, p.296).
4. The Nobes (1991) study has been criticised by Skerratt and Whittington (1992), who argue that the cyclical model is both underdetermined theoretically and non-descriptive empirically.
5. The approach of Jones and 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. Awareness of narrative as a mode of providing explanation and understanding is spreading beyond the historical aspects of accounting research into broader organisational and managerial contexts. Recently, Llewellyn has called for the greater use of narratives in accounting and management research, noting that “narratives can be explanatory but, more significantly for accounting and management research, narratives can make some stronger research claims than calculative research. ... [N]arratives can reveal the individual, human projects within organisations and ... can construct and identify emerging organisational strategies” (Llewellyn, 1999, p.233).
8. These are borrowed from the work of the American literary theorist, Northrop Frye (1957).
9. Much of the historical evidence for Relevance Lostwas summarised by Kaplan in a paper entitled “The Evolution of Management Accounting” (Kaplan, 1984), showing the persistence of the theme of evolution in different contexts of historical accounting research. It is possible that this use of “evolution” was particularly provocative to “new” accounting historians such as Hopwood and Miller. Since
10. White (1973, p.375) notes that irony or scepticism “is implicitly present in every historian’s attempt to wrest the truth about the past from the documents”, and is manifested in the critical scrutiny applied to historical materials. However, irony “may be only a tactical tool, functioning as a methodological element in the preliminary stage of research”, and it need not be carried over into the historian’s final presentation of the history in a narrative. Here, the historian will present “the truth” in whatever mode appears to be most appropriate, not necessarily in an ironic mode.
11. White’s view of Marx as a historian is more complex than this: “For Marx, as for Hegel, humanity achieves the condition of a Comic reconciliation, with itself and with nature, by meansof Tragic conflicts which, in themselves, appear to offer nothing more than the consolations of a philosophical comprehension of their nobility” (White, 1973, p.328, emphasis in original).
12. An issue addressed by Miller and O’Leary (1987), in their discussion of how projects of national efficiency that aimed to improve the life of the individual, and through this the nation, involved innovations in human accounting through processes of standard costing.
R
Reeffeerreenncceess
American Accounting Association, (1970), Committee on Accounting History,
Accounting Review, Vol.45, Supplement, pp.52-64.
American Accounting Association, (1977), Committee on Concepts and Standards for External Financial Reports, Statement on Accounting Theory and Theory Acceptance,New York: American Accounting Association.
Armstrong, P., (1994), “The Influence of Michel Foucault on Accounting Research”,
Critical Perspectives on Accounting, Vol.5, No.1, pp.25-55.
Berkofer, R.F. Jr., (1995), Beyond the Great Story: History as Text and Discourse,
Cambridge (Mass): The Belknap Press of Harvard University Press.
Bowler, P.J., (1989),The Invention of Progress: The Victorians and the Past, Oxford: Blackwell.
Broadbent, J. and Guthrie, J., (1992), “Changes in the Public Sector: a Review of Recent ‘Alternative’ Accounting Research”, Accounting, Auditing & Accountability Journal, Vol.5, No.2, pp.3-31.
Bromwich, M. and Bhimani, A., (1989), Management Accounting: Evolution not Revolution, London: Chartered Institute of Management Accountants.
Burns, R.M. and Rayment-Pickard, H., (2000), Philosophies of History: From Enlightenment to Postmodernity, Oxford: Blackwell.
Bury, J.B., (1920), The Idea of Progress: An Inquiry into its Origin and Growth, London: Macmillan.
Carnegie, G.D. and Napier, C.J., (1996), “Critical and Interpretive Histories: Insights into Accounting’s Present and Future Through its Past”, Accounting, Auditing & Accountability Journal,Vol.9, No.3, pp.7-39.
Carnegie, G.D. and Napier, C.J., (1999), “Exploring Comparative International Accounting History”. Paper presented at the first Accounting History International Conference, Melbourne, August.
Carr, E.H., (1964), What is History?Harmondsworth: Penguin.
Chambers, R.J., (1966), Accounting, Evaluation and Economic Behavior,Englewood Cliffs: Prentice-Hall.
Chambers English Dictionary,(1990), Edinburgh: Chambers.
Chatfield, M., (1977), A History of Accounting Thought,revised edition, Huntington (NY): Krieger.
Condorcet, J.A.N. de Caritat, Marquis de, (1955), Sketch for a Historical Picture of the Progress of the Human Mind, trans. J. Barraclough, London: Weidenfeld and Nicolson.
De Roover, R., (1955), “New Perspectives on the History of Accounting”, Accounting Review, Vol.30, No.3, pp.405-20.
Edwards, J.R., (1988), A History of Financial Accounting,London: Routledge. Fleischman, R.K., Mills, P.A. and Tyson, T.N., (1996), “A Theoretical Primer for
Evaluating and Conducting Historical Research in Accounting”, Accounting History,NS Vol.1, No.1, pp.55-75.
Fleischman, R.K. and Tyson, T.N., (1997), “Archival Researchers: an Endangered Species?” Accounting Historians Journal,Vol.24, No.2, pp.91-109.
Frye, N., (1957), The Anatomy of Criticism: Four Essays, Princeton: Princeton University Press.
Fukuyama, F., (1992), The End of History and the Last Man,London: Penguin. Funnell, W., (1998), “The Narrative and its Place in the New Accounting History: the
Rise of the Counternarrative”, Accounting, Auditing & Accountability Journal,
Vol.11, No.2, pp.142-62.
Garner, S.P., (1954), Evolution of Cost Accounting to 1925, Tuscaloosa: University of Alabama Press.
Goldstein, L., (1976), Historical Knowing, Austin: University of Texas Press. Graham, G., (1997), The Shape of the Past, Oxford: Oxford University Press. Hegel, G.W.F., (1956), The Philosophy of History, trans. J. Sibree, New York: Dover. Hopwood, A.G., (1985), “The Tale of a Committee that Never Reported: Disagreements
on Intertwining Accounting with the Social”, Accounting, Organizations and Society,Vol.10, No.3, pp.361-77.
Hopwood, A.G., (1987), “The Archaeology of Accounting Systems”, Accounting, Organizations and Society,Vol.12, No.3, pp.207-34.
Hoskin, K.W. and Macve, R.M., (2000), “Knowing More as Knowing Less? Alternative Histories of Cost and Management Accounting in the US and the UK”,
Jenkins, K., (1999), Why History? Ethics and Postmodernity,London: Routledge. Johnson, H.T., (1992), Relevance Regained: From Top-down Control to Bottom-up
Empowerment,New York: The Free Press.
Johnson, H.T. and Bröms, A., (2000), Profit Without Measure: Extraordinary Results through Attention to Process and People, London: Nicholas Brealey Publishing. Johnson, H.T. and Kaplan, R.S., (1987), Relevance Lost: The Rise and Fall of
Management Accounting, Boston: Harvard Business School Press.
Jones, S. and Aiken, M., (1995), “British Companies Legislation and Social and Political Evolution During the Nineteenth Century”, British Accounting Review,
Vol.27, No.1, pp.61-82.
Kaplan, R.S., (1984), “The Evolution of Management Accounting”, Accounting Review, Vol.59, No.3, pp.390-418.
Kaplan, R.S. and Norton, D.P., (1996), The Balanced Scorecard, Boston: Harvard Business School Press.
Keenan, M.J., (1998), “A Defence of ‘Traditional’ Accounting History Research Methodology”, Critical Perspectives on Accounting, Vol.9, No.6, pp.641-66. Kuhn, T.S., (1962), The Structure of Scientific Revolutions,Chicago: University of
Chicago Press.
Laudan, L., (1977), Progress and its Problems: Towards a Theory of Scientific Growth,
Berkeley: University of California Press.
Lee, T.A. and Parker, R.H. (eds.), (1979), The Evolution of Corporate Financial Reporting,Sunbury-on-Thames: Nelson.
Littleton, A.C., (1933), Accounting Evolution to 1900, New York: American Institute Publishing Company.
Llewellyn, S., (1999), “Narratives in Accounting and Management Research”,
Accounting, Auditing & Accountability Journal,Vol.12, No.2, pp.220-36. Maltby, J., (1999), “Accounting does not ‘Evolve’: a Reply to Jones”, Accounting
History, NS Vol.4, No.2, pp.87-100.
McKendrick, N., (1970), “Josiah Wedgwood and Cost Accounting in the Industrial Revolution”, Economic History Review,second series, Vol.23, No.1, pp.45-67. Miller, P., (1991), “Accounting Innovation Beyond the Enterprise: Problematizing
Investment Decisions and Programming Economic Growth in the UK in the 1960s”,
Accounting, Organizations and Society, Vol.16, No.8, pp.733-62.
Miller, P., Hopper, T. and Laughlin, R., (1991), “The New Accounting History: an Introduction”, Accounting, Organizations and Society,Vol.16, No.5/6, pp.395-403. Miller, P. and Napier, C., (1990), “How and Why Should We Do the History of Accounting?” Paper presented at the History of the Accounting Present Conference, Denton, Texas, November.
Miller, P. and Napier, C., (1993), “Genealogies of Calculation”, Accounting, Organizations and Society, Vol.18, No.7/8, pp.631-47.
Mills, P.A., (1993), “Accounting History as Social Science: a Cautionary Note”,
Accounting, Organizations and Society, Vol.18, No.7/8, pp.801-3.
Mumford, M., (1979), “The End of a Familiar Inflation Accounting Cycle”, Accounting and Business Research,Vol.9, No.34, pp.98-104.
Napier, C.J., (1987), “Research Directions in Accounting History”, British Accounting Review,Vol.21, No.3, pp.237-54.
Neimark, M.K., (1990), “The King is Dead. Long Live the King!”, Critical Perspectives on Accounting, Vol.1, No.1, pp.103-14.
Neimark, M.K., (1994), “Regicide Revisited: Marx, Foucault and Accounting”, Critical Perspectives on Accounting, Vol.5, No.1, pp.87-108.
Nisbet, R.A., (1969), Social Change and History: Aspects of the Western Theory of Development,New York: Oxford University Press.
Nobes, C.W., (1991), “Cycles in UK Standard Setting”, Accounting and Business Research, Vol.21, No.83, pp.265-74.
Parker, L.D., (1999), “Historiography for the New Millenium: Adventures in Accounting and Management”, Accounting History,NS Vol.4, No.2, pp.11-42. Ruse, M., (1999), M ystery of Mysteries: Is Evolution a Social Construction?
Cambridge (Mass.): Harvard University Press.
Skerratt, L. and Whittington, G., (1992), “Does the Nobes Cycle Exist, and if so, What Does it Signify? Accounting and Business Research,Vol.22, No.86, pp.173-7. Smith, J.M., (1993), The Theory of Evolution,third edition, Cambridge: Cambridge
University Press.
Solomon, R.C., (1995), “Progress”, in T. Honderich (ed.), The Oxford Companion to Philosophy (p.722), Oxford: Oxford University Press.
Spengler, O., (1926), The Decline of the West, trans. C.F. Atkinson, London: George Allen & Unwin.
Sterling, R.R., (1979), Towards a Science of Accounting,Houston: Scholars Book Co. Tomkins, C., (1978), “The Development of Accounting”, a discussion paper presented
at the Workshop on Accounting in a Changing Social and Political Environment, London.
Watts, R.L. and Zimmerman, J.L., (1986), Positive Accounting Theory, Englewood Cliffs: Prentice-Hall.
White, H., (1973), Metahistory: The Historical Imagination in Nineteenth-Century Europe,Baltimore: Johns Hopkins University Press.
White, H., (1987), The Content of the Form: Narrative Discourse and Historical Representation,Baltimore: Johns Hopkins University Press.
Williams, R.B., (1999), “Lifting Stones: A Place for Microhistory in Accounting Research?”, Accounting History,NS Vol.4, No.1, pp.59-78.
