British Cost and Management Accounting Theory

and Practice, c.1850-c.1950;

Resolved and Unresolved Issues

TrevorBoynsandJohnRichardEdwards
Cardiff
Business
School
University
ofWaks,Cardiff
At theheartof a nation'seconomic successor failureis theperformance
of individualbusinesses, whichitselfreflectsthe qualityof decisions madeby
businessmen. To makedecisions, businessmen requireinformation,including
accounting information.Despitethelackof detailedresearch into the account-
ing recordsof businesses, andhowtheywereusedto informdecision making,
there has nevertheless grown up a conventional wisdomdirectedat the
inadequacy of costing
datafor decision making,the non-adoption by business
of bestpracticeasespoused in theliterature,andthe failureof accountants to
providethe lead in the construction of costingsystems[Pollard,1965;
Solomons,1952;Yamey,1962].Recentarchival-based research,however,has
begunto unravelimportantelements of thisconventional wisdom,andthepur-
poseof thispaperis to sununarize its findingsandto examineits implications
for a broad-based assessment of the developmentof cost and management
accounting theoryandpractice. Precisestartandenddateshavenot beenfixed
for thisstudy,butattentionis focused principallyontheperiodc.1850-c.1950.

The Scopeof Cost and ManagementAccounting

Costaccounting andmanagement accounting todaycombineto provide

managers with the accounting informationrequiredto help them conduct
business operations in anefficientmanner.Parker[1984,p. 47] haspointedout
that,in its modemmeaning,costaccounting is difficultto distinguishfrom
management accounting, whileScapens [1991,p. 10]hasnotedthat"theterms
cost accountingand managementaccountingnow tend to be used
synonymously in textbookrifles."Suchambiguity is exacerbatedby researchers
examining thehistoricaldevelopmentof accounting whohaveadoptedan even
widerrangeof relatedterms,including costrecording, costing,costaccounting,
managerial accounting,andmanagement accounting, someof whichhavebeen
usedinterchangeably andothersin a specific,discrete manner.
It is our viewthat from the historians'standpoint, a cleardefinitionof
whatis meantby management accounting is needed,andwe feelthatthereis

BUSINESSAND ECONOMIC HISTORY, Volume

Twenty-six,
no.2,Winter1997.
Copyright
¸1997 by theBusiness
HistoryConference.
ISSN0894-6825.

452
 BRITISH COST AND MANAGEMENT ACCOUNTING / 453

particularmerit in adoptinga broadly-based definitionin order to avoid

confusion between thelabelmanagement accounting
anda specifcsetof ideas,
conventions, tools/techniques,
and practices which,at any point in time,
constituteitsmajorelements[Boyns andEdwards, 1996].Suchdefinitions were
popularin the early-1950s, the time when the term first enteredBritish
accounting terminology.
The Instituteof Chartered Accountants in England
andWales,for example, suggested
that"anyformof accounting whichenables
businessto be conductedmore efficienfiycan be regardedas management
accounting..."[ICAEW, 1954,para.2]. We recognize thatthe term "manage-
mentaccounting" wasnot usedin the nineteenthcentury,but thisis not seen
to be a problem.The solepurpose is to discover
whethersystems researched
meetthebasiccriterionsubsequenfiy articulated
asjustifying
thatdesignation.

CostandManagementAccountingTheoryto c.1950

David Solomons' seminal article of 1952, entitled "The historical

development of costing," is animportantreference pointfor all studies of this
kind.In that paper,whichdrawsextensively on the work of Edwards[1937a
and 1937b],he notesthat,aslateas 1880,virtuallynothinghadbeenwrittenin
Englandon the subjectof costaccounting generally and,therefore,the useof
costaccounting in an industrialsetting.While conceding that Englishpractice
mighthavebeenin advance of theourat thattime,he considered that"allsigns
pointto a lackof interestamongindustrialists in the application of accounting
to industrial processes" [Solomons, 1952,p. 17].Thesestudies haveshownthat
therewere approximately eighttextswhichdevotedsomeattentionto cost
accounting priorto 1880.Amongthese,undoubtedly themostnotablewasthat
of Hamilton[1777/9]but, intfigumgly, his coverage of costingwasseverely
curtailed in thesecond editionof hisworkpublished in 1788[Mepham,1988].
It wasnot untila centurylaterthatfurthersignificant workson costing
beganto appearin Britain,duringa periodwhichSolomons hasdesignated the
"costingrenaissance." In the 1870s,worksby the Scottishaccountant, F. Hayne
Carter[1874],andtheManchester publicaccountant, ThomasBattersby [1878],
addressed certainaspects of costingbut it is generally agreedthat it wasnot
until1887,whenGarckeandFells'Factory Accounts waspublished, thatthe first
Britishtextbookon costaccounting appeared. In so far as the literatureis
concerned, thismessage of Solomons andEdwards asto thepaucity of British
textson costingpriorto the 1870sis consistent withthe findingsfromourown
research [BoynsandEdwards1997a,Boynset al.,1997].
By the 1890s, however, cost accountswere beginningto receive
attentionin generalaccounting textbooks suchasthoseby Dicksee[1893]and
Lisle [1899].The upsurgein the availableliteraturein the late-nineteenth
centurycontinuedapacein the earlytwentiethcentury,with Nicholsonand
Rohrbach[1919,p. 1] claiming that"morethan90%of thisliterature hasbeen
published in the lastdecade,andfully75% in the lastfive years."This links
with theviewof Pixleywhodescribed costaccounting as"a newbranchof the
science" of accounting [1908,p. 131].Solomons, summarizing thenatureof the
454 / TREVOR BOYNS ANDJOHN RICHARD EDWARDS

accounting literaturebetween c.1875andc.1950,foundthat,whereas in the500

yearspriorto thisperiodit hadbeenconcerned with"arathernarrowtechnical
problemin book-keeping" it wasnow concerned "withthe broaderissueof
makingthe accounting recordsmeansomething, of makingthemflexibleand
capableof providinginformation whichwouldbe significant not for one
purpose(say,the measurement of profitor loss)or two (say,in addition, the
finingof selling prices) butfor anyof thepurposes which,in modembusiness,
figuresmaybe calleduponto serve"[1952,p. 2].
Much of the materialusedfor the purposeof Solomons'masterly
exposition of developments fromthe1870s, however,is drawnfromtheover-
seasliterature, in particular
thatof theUnitedStates. Hismainsources included
engineering journalssuchas Engineerin,• TheEngineer, and TheEngineering
Magazine, especially thelastnamed, andit is noticeable
thattherearerehfively
few citations datedlaterthanthesecond decade of thetwentiethcentu•. This
is consistent with Edwards'judgement that"I do not thinkthatin the last30
yearscostaccountants haveaddedmuchto thetheoryof theirsubject"[1937b,
p. 344],butmayreflectrathertoogreata reliance on Edwards' workand/ora
failure to investigatethe full rangeof relevantliterature,especially that
containedin contemporary accounting journals.Hence it is perhapsnot
surprising that Solomons, andotherswho havefollowedhim, suchasWells
[1977],shouldsuggest thatengineers haveplayeda keyrolein thedevelopment
of costingsincethe endof the nineteenth centmy.Whilethismayhavebeen
the casein theUnitedStates, it hasstillto be investigatedwhetherit wasalso
the casein Britain,andthereis evidence fromthecollection of costingarticles
takenfrom the accounting literaturecovetingthe period1887-1952compiled
by Boynset al. [1996]thattheroleof accountants in Britainmaynot havebeen
negligible. If nothingelse,it suggests that professionalaccountants had an
interestin costingmattersfroman earlytime,particularly in respectof issues
suchas:the functionof costing; the form of costaccounts; the allocationof
overheads; costingfor differenttypesof businessorganisation; uniform
costing;standardcosting;budgetary control;costingsystems and industrial
development; costingandmanagement; andtheroleof thecostaccountant.

ManagementAccountingPracticeto c.1900

The workof Edwards[1937b],Pollard[1965],Solomons [1952],Urwick

andBrech[1948/9]andYamey[1962]had,by the 1970s,produced thebroad
conclusion thatmeager developmentsin costing
hadtakenplaceupto thelate-
nineteenth century.Chandler[1977],basedprincipally on research into U.S.
accounting history,arguedthat the development of the large-scale business
enterprise hadhada positiveimpacton thedevelopment of costaccounting in
the late nineteenthand earlytwentiethcenturies. Given the earlierindus-
trializationon thissideof theAtlantic,andthe largerscaleof somebusiness
activities,
at leastup to the middleof the nineteenth centm3r, corresponding
developments might be expectedto have occurredin Britain.Research,
undertaken in themainsubsequent to thedateof theaboveworks,hasshown
 BRITISH COST AND MANAGEMENT ACCOUNTING / 455

that costaccounting progress hadbeenmadeearlyon by companies at the

forefrontof Britain'sindustrialization[seeBoynsandEdwards,1997a].
Thereis clearevidence that,asthecompanies covered by thesestudies
expanded anddepartmentalized eachstageof theproduction process,costing
systemsweredevised, implemented andsubsequently developed. Theresearch
also suggests that certaingeneralizations whichmakeup the conventional
wisdomasto thedevelopment of costaccounting in Britainpriorto 1900are
no longertenable. Oneof themostimportant of these,basedon arguments by
Gamer [1955:9], Solomons [1952],andEdwards[1937b],is theviewthatcost
andfinancial accounts wereimtiallyseparate, thatis, the costing records were
developed separately fromthe (financial) accounts proper,andevenpossibly
outsidethe doubleentrysystem. Somewriters[Edwards, 1937b,pp. 389-90;
Johnson andKaplan,1987]haveargued thattheprocess of integrationof cost
andfinancialaccounts, irrespectiveof whenk occurs, is not a goodthing,since
the overbearing influenceof financialaccounting considerations resultsin the
costaccounts losingrelevance for the purposeof decisionmaking.However,
recentresearch
hasshownthat costandfinancialaccounting
systems
in British
fransdidnot startoutseparate fromoneanother. Rather,thereis evidence of
theintegration of costandfinancial accounting systems withina doubleentry
frameworkwell beforeSolomons'so-calledcostingrenaissance and, in one
case,thatof the Staveley ironworks,asfar backas1690 [EdwardsandBoyns,
1992].A dramatic inconsistency
is thereforeseento existbetweenthe conventional
wisdomin regardto theseparate originsof costandfinancial accounts, based
asit is largelyon theevidence of the literature,
andthe contents of the archives
interrogated.
It is onethingto discover thatcost/management informationhasbeen
generated by an accounting system, but quiteanotherto demonstrate how,if at
all,it hasbeenused.Thegeneral lackof evidence of theusemadeof systems of
doubleentrybookkeeping for routineconcerns suchaseliminating wasteand
inefficiency, however,is unsurprising. Suchquestions weremattersprincipally
for theconsideration of managers relatively
lowdownthemanagerial hierarchy,
with communication of informationoftenby word of mouthor in a written
form lesslikelyto havesurvived. However,thereis evidencethat suchinfor-
marionwasusedto informstrategic decision making.In theirstudyof Dowlais,
BoynsandEdwards[1997b]foundthattheprocess of accounting changewas
contingentupon a set of uniquecircumstances that shapedattitudesand
actions. An interaction wasdiscerned between theaccounting system, organiza-
tional structureand management decisionmakingprocess(for example,
concerning the purchase of the Penydarren propertyandthe switchto steel
manufacture, in the late-1850sand 1860s)which,however,wasmorein line
with the suggestion of Alford [1976]of a complex,symbioticrelationship
betweenstrategy andstructure thanwith the causalexplanation preferredby
Chandler, namelythatstructure followsstrategy.
At anothercoalandiron concern,Consett,BoynsandEdwards[1995]
have shownhow, in orderto providethemselves with more appropriate
information on thequestion of whethertheyshouldabandon themanufacture
456 / TREVOR BOYNS ANDJOHN RICHARD EDWARDS

of iron and finishedproducts, the boardgaveinstructions for an important

change to beeffected in thecosting system. Thus,in 1867,transfers of coaland
coketo the iron department, whichhadpreviously beenmadeat cost,were
now madeat accounting priceslinkedto the marketpriceof coke.Although
the new systemindicateda losson iron manufacture, ConseWs board,after
seeking the adviceof an outsideexpert,decided not to closedownthe com-
pany'sironoperations. Thiswaspartlydueto theviewthatthetippleeffecton
coalandcokeproduction, andhenceoverallprofitability of theconcern, would
be adverse,andthe beliefthatmodernization andgreaterefficiency couldlead
to profitableiron manufacture in the future.This evidence illustratesthat
management in the mid-nineteenth centuryunderstood the complexities of
decisionmaking,recognizedthe need for relevantinformation,undertook
developments to ensure its availability,
andwerenotinclinedto be rushedinto
closinga loss-making department whenotherconsiderations wereparamount.
As at Dowlais,the subsequent historyof Consettsuggests that accounting
information,despitethe pessimistic assessments of Pollardand Yamey
regarding the Industrial Revolution period,helpedthe boardmakethe right
decision. Not only did the companyproveprofitablein the late-nineteenth
century,but the decisionsecured ConseWs long-termsurvival- an outcome
whichappears to havebeenanimportant motivationat Consett,aswithmany
other businesses at this time.

Management AccountingPracticec.1900to c.1950

In this sectionsecondary
sources areinterrogatedfor evidenceof the
development of management accountingprocedures duringthe period1900-
1950,therebeingno detailed studies
of accountingpractice
withinBritishfurns
for thisperiod.

Scakandsi•eodeBritish
business
Businessesoperatingin the Britishcoaland iron industryaroundthe
middleof thenineteenth century,suchasDowlais,Consett, andStaveley,had
clearlydevelopedinto multiunitenterprises [Boynsand Edwards,1995;
Edwardset al., 1995],thoughthereis littleevidence thattheyhaddeveloped
themostcomplexformsof themulti-divisional structure,
suchasthosebased
on geographical regionsor differentend-products.The continuinggrowthin
the sizeof Britishbusinesses in the period1900-1950mightthereforebe
expectedto have had an impacton the development of management
accounting systems.Despitewhatsomeconsider to bethe"corporatelag"that
occurred in Britaincompared to the mature"managerial capitalism"of the
UnitedStates[Gourvish, 1987,pp. 33-4],growthin corporate
scaleresultedin
greaterbureaucracy [Perkin,1989,p. 272;Hannah,1983,p. 72] andalongside
this came the "increasedfunctionaldifferentiationof managerialtasks,"
amongstwhich flourishedthe accounts department[Hannah,1983,p. 78].
According to Hannah,"it wasparticularlythroughdevelopmentsin accounting
that the introduction of new methodsfor the oversightand assessment of
 BRITISH COST AND MANAGEMENT ACCOUNTING / 457

subsidiaries
was encouraged
and facilitated"[1983,p. 80]. Accountants
are
naturally
seento havebeenclosely implicated in thisprocess,
becoming
"quickly
familiarised
withtheproblems of imposing uniformaccountingon a
mergerandof controllingcapkalexpenditure
by forwardbudgeting"[Hannah,
1983,p. 86]. It couldbe expected,
therefore,
that accountants
wouldhave
playedanimportant rolein developing
accounting practice
andalso,possibly,
have influencedthe relationship
betweentheoryand practice.Beforewe
examinetheseissuesmoreclosely,we firstexamine
the literaturefor evidence
asto the developmentof management accounting
practice in the firsthalfof
the twentiethcentury.

Theliterature
• assessment
ofmanagement
accounting
practice
Overall, the literatureprovidessomethingof a confusedpicture.
Dicksee[1928,p. 4], arguedthat"goodcosting" procedurescouldalready be
foundin the basicindustries,suchascoalandiron,by the turnof the century
and, given the resultsof the recentarchive-based studiesby Boynsand
Edwards,this may be a correctassessment. In other sectors,especially
engineering, where,as part of the government's determinationto prevent
profiteeringin the absenceof marketconstraints,cost accountingpractices
cameunderclosescrutinyduringWorld War I, suchsystems, where they
existed,
werefoundwanting[Marfiner,1980;Loft, 1986,p. 141].
World War I, as a resultof the efforts made to introducecosting
systemsintogovemment departments andbusiness generally [Garrett,1961,p.
123;Martinet,1980,p. 139],hasbeenseenby Loft asa catalyst, movingcost
accounting from "obscure cornersof greatindustrial concerns" [1986,p. 147],
"into the light" [1986, p. 141]. While there were undoubtedlysome
developments, others,suchasthe BalfourCommitteeon Tradeand Industry,
1924[Stacey, 1954,pp. 123-4],dePaula[1948,p. 141],andDicksee[1928,p. 4],
have questionedtheir extent.Cornwellconfreres that, duringthe inter-war
period"costingandstandard costingwereintroduced at a languidratewhen
theywere recognised at all" [1991,pp. 137-8],while the Presidentof the
Societyof IncorporatedAccountantsand Auditors, speakingin 1945,
complained thatthe "budgetary statementis stillimperfectlyunderstood in this
country,exceptin comparatively fewcases"[quotedin Stacey1954,p. 207].
The somewhat conflicting natureof the aboveevidencesuggests the
possibilityof considerable variationin cost and managementaccounting
practicebetweentime and place,especially betweendifferentbusinesses and
differentsectorsof industry.Crucialto an understanding of suchdifferences,
and the links,if any,betweenaccounting theoryand practicein the early
twentiethcentury,is the role playedby professional accountants in the
development of costandmanagement accounting systems.

Theroleofprofissional
accountants
The appearance of professional
accounting
bodies,whichoccurredin
Scotland in 1853,andin EnglandandWalesin 1870,is thoughtby someto
have retardedthe involvementof accountants in the provisionof cost
458 / TREVOR BOYNS ANDJOHN RICHARD EDWARDS

accounting information. Publicaccountants wereundoubtedly heavilyinvolved

in liquidationwork,the detection of fraudandthe auditfunction,but one
contemporary observer criticized
theaccountant for failingto meetthe needs
of "themanufacturer whomayfeelthathedoesnotpossess theinformationhe
desires,but maybe unawareof the sourcefromwhichit canbe obtained"
[Strachan, 1903,p. 7]. For Parker,the perceived indifference of professional
accountants to costingis explainedby thefactthat:"Mostpractising account-
antsat thistimehadlitfiecontactwithmanufacturing companies, evenin audit
work,theirclients beingmainlyengaged in banking,
insurance, railways,
water,
docksand mines"[1986,p. 42]. More recentresearch, however,suggests a
slightly
differentpicture.WhileParker isundoubtedly rightto suggestthatmost
largecompanies in Britainin thelatenineteenth centuryfellinto the business
categories mentioned,a good numberof manufacturing companies were
quotedon the Londonor provincial stockexchanges in the 1880s,by which
time most were the subjectof a professional audit [Andersonet at., 1997].
Althoughthereis evidenceto suggestsomeantipathytowardsthe external
auditoron the part of management, seeinghim chieflyas"the scrutineer and
compilerof aggregate results"ratherthansomeone capableof helpingshape
business plans[Strachan, 1903,p. 6], the archivesof latenineteenth century
coal,iron,andsteelcompanies containexamples of publicaccountants, many
of themwithleading firms,offeringadviceoncosting systems ona consultancy
basis.ExamplesincludeChadwick,Adamson& Co. advisingthe massive
Botckow,Vaughan& Co. Ltd on the contentof theiraccounting systemand
almostcertainly theircostingsystem in 1866,MessrsDeloitte,Dever,Griffiths
& Co. andMessrsJohnAdamson& Co. the SheltonIron, Steeland Coal Co.
Ltd. in 1889on thebestmethodfor keeping
the company's books,including
the preparationof monthlycostsheets,
andW.B. Peat& Co. at the South
DurhamIron& SteelCo.Ltd.wheretheysubmitted a draftschemeof uniform
cost accounts for each works to the board in 1898.
Additionalevidence that professionalaccountants,includingchartered
accountants, were increasinglyinterestedin costingmattersfrom the late-
nineteenth century isprovidedbya recentstudyof thecontentof theaccounting
literature[Boynset at.,1996].Someof thecontributors to thisliterature
were
undoubtedly encouraged to pickup the pen as a consequence of becoming
moreclosely connected withindustt% someasa resukof effectsof WorldWar
I, mostnotablythroughthe operations of the Ministryof Munitionswhere
therewas a greatneed"for costaccountants equippedwith the necessary
combination of accountingknowledge anda detailedunderstanding of all the
technical,engineeringand manufacturing problemsinvolvedin costing
explosives, iron ore and coal mining,shell,gun and aircraft-production"
[Martinet,1980,p. 132].By 1918therewerereportedto be 340chartered and
incorporated accountantson thestaffof theMinistryof Munitions alone[Loft,
1986,p. 146],with keyappointments including SamuelHardmanLever,who
hadacquired hisextensivecostingexperience andskillsin theUnitedStatesas
a parmerin Barrow,Wade,Guthrie& Co. [Marfiner,1980,p. 132;Jones,1981,
p. 129],the incorporated accountant,
James(laterSirJames)Martin [Garrett,
 BRITISH COST AND MANAGEMENT ACCOUNTING / 459

1961,p. 103],JohnMann,HaroldJudd[MannJuddGordon,1967,p. 32],

MarkWebster Jenkinson,andWilliamMcLintock[Winsbury, 1977,p. 31].
It is almostcertainlythe casethat professional finns becamemore
closelyinvolvedin costingmatterspost-World War I, with somenaturally more
prominent thanothers. Deloitte,Plender, Griffiths& Co.,forexample, begana
long-term connection withtheBankof England in 1919,whentheyprepared a
costaccounting system tailoredto theBank'srequirements, subsequently acting
in a consultation capacityto "the governoron manyoccasions on matters
outsidethe domesticeconomyof the bank" [Kettle,1957, p. 11]. Price
Waterhouse, however, waslessconcerned with suchworkandthoughcosting
engagements grew duringthe inter-warperiod,they remainedof minor
significance until1945,principally because thefirm regarded itselfprimarilyas
auditors.It wasGamsey,however,reflecting a forward-looking attitudewhich
was not typicalof the firm at this time, who recruitedAlbert Cathles,an
Edinburgh accountant whohadbeenemployed bytheMinistryof Munitionsas
DeputyController of FactoryAuditCosts,in 1919.Cathles undertook a variety
of business investigations specializing
in "worksandcostaccounting" [Jones,
1995, p. 118]. Indeed,a Systems Departmentwas set up followingCathles
appointment, butit remained fairlysmall,"undertaking specific tasksprobably
forexisting auditclients" [Jones,1995,p. 139].
Other ways in which charteredaccountants influencedcosting
developments includedtakingup appointments with particular businesses or
throughactingasadvisors to businessorganizations.Thus,afterqualifying asa
chartered accountant in 1920,BertrandWarragmovedalmostimmediately into
industry,workingas assistant secretaryto a foundrycompany in Derby.He
thenjoinedJosephLucas,becoming company secretaryin 1924,a boardmem-
berin 1935,managing directorin 1948andchairman in 1951.According to the
ftrm'shistorian, his"strength asanaccountant [was]invaluable in assessing and
shaping the company's financial policyandprocedures" [Nockolds, 1976,p.
298] and he is considered to havebeenresponsible for transforming Lucas
from a "Birmingham business producing accessoriesfor the motorindustry
into an international groupwith interests spreading into aviationcomponents
andindustrial engineering" [Jeremy andTweedale, 1994,p. 220].Anothersuch
example is BasilSmallpeice, whomovedfromBullimore & Co.immediately on
qualification,in 1930,to become accountant andassistant secretary at Hoover
Ltd. He thenjoinedDoulton& Co. Ltd in 1937,wherehe becamesecretary
andchiefaccountant responsible for costingandaccountancy at the factories
[TheAccountant,
7 January 1950,pp.10-11].Otherexamples of theroleplayed
by professional
accountants in theutili•ationof accounting's
potential for the
purposeof business management areL. Robsonat Pilkingtons[Barker,1977,
p. 337]andJamesHornbyJollyandEric Charles Drakeat GKN [Jones, 1985,
pp. 523-5;Jones,1990,p. 288]. Sir w'filiamBarclayPeatplayeda rather
differentbutimportantroleassecretary to theNationalFederationof Iron and
SteelManufacturersfollowing itsformationc.1918.Ultimately,
in June1935,its
successor organizationpublished "TheUniformCostSystem for theIron and
SteelIndustry"[BritishIron andSteelFederation, 1937].
460/ TREVOR BOYNSANDJOHN RICHARDEDWARDS

Overall,the period1900-1950
sawprofessionally
qualified
accountants
moving
frompublicpracticetodominate
control
of thefinancefunction
within
businessand,indeed,to become heavilyinvolvedin business
managementat all
levels[Matthewset al.,1998].The numberof professionalaccountants
working
in business,
for example,rosefrom 270 in 1911to approximately 18,500in
1951,andwerebythelatterdatecomfortably themostprominent professional
grouping
represented
around
thecorporate
boardtable.

RelationshipbetweenTheory and Practice

The available evidencesuggeststhatthe relationshipbetweencostand

management accounting theoryandpracticehasalteredsignificantly overthe
pastone hundredyearsor so. In the periodprior to Solomons' costing
renaissance,practicein someindustries,
mostparticularly coal,iron,andsteel,
wasin advanceof theorybut, in late twentiethcenturyBritain,management
accounting theoryis muchin advanceof practice[ Coateset al., 1983,pp. 280
and475-6;Drury,1985,pp. 784-6;Scapens, 1991,ch. 3]. But whendid this
reversaloccur,andhowandwhyhasit comeabout? Andwhat,if any,wasthe
role of accountants? As yet,we know all too little aboutthe natureof the
accounting systemsusedbyBritishbusinesses in thetwentiethcenturyandhow
theyhavedeveloped, andwhetheror not anychanges wereinfluenced by
developments in accountingtheory.In the contextof Britain'srelative
economic declinesincethelatenineteenthcentury, theroleplayedby account-
ingsystems mayhavebeenimportant, particularly
whencompared to whatwas
happening in othercountries,mostnotablytheUnitedStates[see,for example,
Locke,1979a,b].While thereis circumstantial
evidencethat the United States
developed andimplemented techniques suchasstandard costingandbudgetary
controlmorerapidlythanin Britain,thisstillhasto be establishedasdoes,if it
was the case,the questionof whethersuchdifferences had any long-term
economic implications.
The research agendafor Britishaccounting andbusiness historiansas
we moveinto the twenty-firstcenturyis thereforesubstantial.It includes,in
additionto the above,the needfor investigating the accounting recordsof
firmsoperatingin sectors
suchastextilesandengineering before1900,in order
to determinewhether the resultsof studiesof the coal, iron, and steel sector
applymoregenerally, andof firmsin all sectors
duringthetwentieth century.
Only when it is knownwhat washappening, ratherthanwhat othershave
perceivedto havebeenthecase,willit becomepossible to addressissuessuch
as the impactof accounting systems
on economicperformance, whetherof
individualbusinessesor of the economyasa whole.Comparisons with what
washappening in othercountries suchasthe UnitedStateswill alsoprovide
importantcriteria
forjudging thesignificance
of developmentsin Britainduring
thetwentiethcentury,asit hasdoneforearlier
periods[see,forexample, Boyns
et al., 1997].
 BRITISH COST AND MANAGEMENT ACCOUNTING / 461

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