Description
The study examines the contest between rival interests following the Treasury’s decision to explore the potential of
‘‘the mercantile system of double entry’’ bookkeeping as the basis for recording and reporting the financial affairs of
British central government. At the heart of the ensuing dispute was an ideological conflict between individuals representing
the competing interests of the aristocracy and those of the new capitalist classes.
British central government and ‘‘the mercantile system of
double entry’’ bookkeeping: a study of ideological con?ict
John Richard Edwards
a,
*, Hugh M. Coombs
b
, Hugh T. Greener
c
a
A
˜
ccounting Section, Cardi? Business School, Aberconway Building, Colum Drive, Cardi?, Wales CF10 3EU, UK
b
Division of Accounting and Finance, Business School, University of Glamorgan, Pontypridd CF37 1DL, UK
c
Finance Department, Cardi? University, Cardi? CF10 3XR, UK
Abstract
The study examines the contest between rival interests following the Treasury’s decision to explore the potential of
‘‘the mercantile system of double entry’’ bookkeeping as the basis for recording and reporting the ?nancial a?airs of
British central government. At the heart of the ensuing dispute was an ideological con?ict between individuals repre-
senting the competing interests of the aristocracy and those of the new capitalist classes. The battleground was whether
the mercantile system of double entry should be designed to re?ect the ‘‘old society’’ priorities of stewardship,
patronage and personal accountability or ‘‘new society’’ pressure for a business framework judged capable of achieving
‘‘cheap and e?cient government’’. # 2002 Elsevier Science Ltd. All rights reserved.
1. Introduction
Accounting historians, particularly the tradi-
tional, have been criticised for tracing account-
ing’s history as one of continuous evolution,
technical elaboration and improvement towards
its present state. This method of studying
accounting’s past was critiqued, in 1987, by a
leading architect of ‘‘The new accounting his-
tory’’,
1
Anthony Hopwood. His essay, entitled
‘‘The archaeology of accounting systems’’, argued
that most prior studies of the history of account-
ing had ‘‘adopted a rather technical perspective
delineating the residues of the accounting past
rather than more actively probing into the under-
lying processes and forces at work’’ (Hopwood,
1987, p. 207). This critical theme was taken up by,
amongst others, Miller and Napier (1993) who
made the case for genealogies of calculation rather
than traditional accounting history, with the term
genealogy conveying the need to investigate the
outcomes of the past rather than to pursue a
meaningless quest for the origins of the present.
This paper examines an interesting and impor-
tant episode in accounting’s history that saw an
attempt to introduce a supposedly superior system
of accounting to record and report the ?nancial
a?airs of Britain’s central government. The initia-
tive was resisted and we draw on concepts of
ideological con?ict and interest representation to
help comprehend the reasons for this dichotomy
and how it was resolved. Achievement of a better
accounting was seen to involve the adoption of
double instead of single entry bookkeeping and
accruals in place of cash based record keeping and
?nancial reporting. We will see that outcomes
0361-3682/02/$ - see front matter # 2002 Elsevier Science Ltd. All rights reserved.
PI I : S0361- 3682( 01) 00060- 5
Accounting, Organizations and Society 27 (2002) 637–658
www.elsevier.com/locate/aos
* Corresponding author. Tel.: +44-29-2087-6658.
E-mail address: edwardsjr@Cardi?.ac.uk (J.R. Edwards).
1
The title of the introductory article to a special issue of
Accounting, Organizations and Society, 1991, 5/6 (Miller, Hop-
per, & Laughlin, 1991).
from this dispute, which have had implications for
government sector accounting up to the present
day, included the rejection of accruals accounting
and, although double entry bookkeeping was
apparently introduced, evidence of the extent of its
adoption, whether in substance or in form, awaits
the location and study of relevant archival
records.
The plan to introduce double entry book-
keeping, to each department of State, in 1828,
inspired a ‘‘hostile’’ encounter between the three
Treasury Commissioners called in to formulate the
new system. These three Commissioners—‘‘the
leading public accountant of the day’’ (Peter Har-
riss
2
Abbott) and two senior civil servants (Tho-
mas Constantinus Brooksbank and Samuel
Beltz)—each accepted the need to apply ‘‘the
mercantile system of double entry in keeping the
public accounts’’ (BPP 1829, vi(b), Appendix No.
1). The battleground became the particular version
of double entry bookkeeping to be imposed. We
will see that Brooksbank and Beltz endorsed a
strictly stewardship-oriented form of double entry
designed to maintain consistency with the tradi-
tional objectives of the method of accounting—
charge and discharge
3
—then still widely used to
account for the ?nancial a?airs of British central
government. Abbott was equally determined to
transpose, without modi?cation, the system of
double entry employed by business,
4
thereby
implying the need to induce a business-like manner
into the management of British central govern-
ment’s ?nancial a?airs.
Contextualisation of this paper in time and
place is presented in the next two sections which
reveal (1) the rising criticism of central govern-
ment expenditure in the 1820s and related con-
cerns with the adequacy of prevailing government
accounting practice, and (2) the con?ict of ideolo-
gies that emerged between the new capitalist class
and the aristocracy as played out in pressure for
‘‘cheap and e?cient government’’ based on con-
temporary political economic theory. In Section 4,
we explore the backgrounds and prior experiences
of the participants in this con?ict. The key con-
tents of the separate and con?icting reports made
to the Lords of the Treasury (one by Abbott and
the other by Brooksbank and Beltz) are detailed
and analysed in Section 5. Next, we explain their
divergent views in terms of ideology and interest
representation and, in the penultimate section, put
forward explanations for the choice made by the
Lords of the Treasury. The paper concludes with a
discussion of Peter Harriss Abbott’s failure to
persuade the Lords of the Treasury to adopt his
business-oriented version of double entry book-
keeping.
2. Government ?nancial accountability and control
The lack of adequate accountability on the part
of British government was the subject of recurring
criticism (Roseveare, 1969) that gained momen-
tum in the years following the end of the Napo-
leonic wars in 1815. The national debt had
4
Double entry bookkeeping was variously referred to, up to
and around this time, as the Italian system, the Venetian sys-
tem, the commercial system, merchants’ accompts, and the
mercantile system. The source of the latter label is quite prob-
ably its increasing use to record the transactions of the rapidly
developing trading or mercantile enterprises dating from the
late-middle ages. The description may well have been coined
during the mercantilist period when, from the sixteenth to the
eighteenth century, major trading nations pursued economic
policies based on the premise that national wealth and power
were best served by close regulations designed to maximise the
balance of trade and stock of precious metals. The term sur-
vived into the antithetical period of laissez faire economics of
Adam Smith and the aspirant middle classes of the early nine-
teenth century, but was gradually replaced, along with the
other labels, by references to double entry bookkeeping.
2
Sometimes alternatively spelt Harris or Hariss in doc-
umentary sources.
3
Charge and discharge is a system of agency accounting
associated particularly, though by no means exclusively, with
manorial and governmental a?airs, through which the steward
or accounting o?cer discharged his ?nancial responsibility to
the higher authority (the lord of the manor or the government).
The agent was charged with sums of money (sometimes also
goods) for which he (sometimes she) was responsible (for
example, resources transferred by the principal to the agent or
collected by the agent on behalf of the principal), discharged
for legitimate payments and required to account for any bal-
ance outstanding. Charge and discharge made no distinction
between capital and revenue and was often, simply, a cash
account.
638 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
increased dramatically from £242.9 million at the
outbreak of hostilities in 1793 to £744.9 million in
the year that Napoleon Bonaparte was defeated at
Waterloo (Mitchell, 1988, p. 601). In the immedi-
ate post-war years, there emerged a strong body of
opinion in favour of bringing government expen-
diture under tight control, reducing the tax burden
and cutting down on government borrowing. John
Charles Herries served as ?nancial adviser to
Prime Minister, Lord Liverpool, during this
period, and it proved to be a frustrating stage of
his career. In a letter to the Chancellor of the
Exchequer, Rosenhagen, dated 13 February 1816,
Herries expressed exasperation that a ‘‘good, wise,
and economical Budget has crumbled in our
grasp, [because] the higher powers have yielded to
the subordinate departments’’ (quoted in Herries,
1880, vol. 1, p. 115). Two months later he urged
the Assistant Secretary to the Treasury to ‘‘take
some steps through the Secretary of State to check
the profuse and lavish expense which is now going
forward there’’ (quoted in Herries, 1880, vol. 1, p.
115). Stubborn resistance from the spending
departments, led by Lord Palmerston at the War
O?ce, produced a total failure of the ‘‘Tory
Government to satisfy the reasonable demand of
the nation for an immediate and su?cient relief
from the immense burdens laid upon the people,
and submitted to, for the prosecution of a just,
necessary and glorious war’’ (Herries, 1880, vol. 1,
p. 116). The result was that government debt
remained undiminished. Indeed, it had risen to
£844.3 million by 1819; a ?gure not exceeded until
the First World War (Mitchell, 1988, pp. 601–
602).
Growing condemnation of government expen-
diture levels and the lack of ?nancial control
(Hansard, 2nd series, vol. 4, 1821, col. 307; vol. 6,
1822, cols. 1114, 1462–3) led to the appointment
of a Select Committee on Public Accounts (BPP
1822, iv, p. 3) to consider ‘‘the best mode of sim-
plifying the accounts annually laid before the
Houses of Lords and Commons, in pursuance of
several Acts of Parliament, respecting the public
income and expenditure’’. In The History of the
Public Revenue of the British Empire, 1790, Sir
John Sinclair observed that, since the reign of
Queen Anne (1701–1714). ‘‘[n]o complete ftate-
ment has been made up, either of the total income
and expenditure of one reign, or even of any one
year’’ (Sinclair, 1790, part III, p. 53). This state of
a?airs persisted until 1822 when the publication of
‘‘an annual balance-sheet of the public receipt and
expenditure’’ was recommended in the Select
Committee’s report (BPP 1868–1869, xxxv,
Appendix No. 13, p. 326). ‘‘The ?rst balance-sheet
of the public income and expenditure of the Uni-
ted Kingdom’’ is for the year ending 5 January
1823 and can be found in the annual ?nance
account of that year (BPP 1868–1869, xxxv,
Appendix No. 13, p. 326). The term ‘‘balance-
sheet’’, as used there, however, does not signify the
availability of a ?nancial position statement in the
modern sense. For business accounting purposes,
the term ‘‘balance sheet’’ had achieved its present
day signi?cance long before 1822 of course but,
within government circles, the label continued to
describe a cash statement despite use of the terms
‘‘income’’ and ‘‘expenditure’’.
5
The politician and for 30 years the leader of the
radical party in Parliament (DNB, 1917, vol. 10, p.
230), Joseph Hume, played an important part in
drawing attention to the unsatisfactory state of the
public accounts.
6
According to Roseveare (1969,
p. 145):
year in, year out, sparing neither Whig nor
Tory governments, Hume challenged the esti-
mates in minute detail. Served by a small
group of expert clerks, Hume was a one-man
select committee on estimates, capable of
producing extremely detailed, carefully
worked-out schemes for ?nancial reform. In
1821 he was the pressure which forced on the
5
This cash statement was of course a ‘‘balance sheet’’ in the
sense that, assuming a cash surplus, the left hand side of this
?nancial statement, when presented in bilateral format,
revealed the opening balance and cash received while the right
hand side listed payments and the closing balance. Such a
statement, as noted above, was the usual product of the system
of charge and discharge accounting, and is also the output from
a system of double entry bookkeeping that is con?ned to a
record of cash transactions.
6
Hume was in?uenced by the philosophy of Jeremy Ben-
tham, also a serious critic of contemporary accounting practice
(Gallhofer & Haslam, 1994a, 1994b; Goldberg, 1957; Hume,
1970).
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 639
Treasury the severe salary cuts of August,
and in 1822 he helped expose the absurdities
of o?cial accounting.
7
Hume’s concern was to expose ‘‘every kind of
extravagance and abuse’’, and his biographer in
the DNB concludes that ‘‘it was chie?y through
his e?orts that ‘retrenchment’ was added to the
words ‘peace and reform’ as the [Tory] party
watchword’’. In pursuing this ideal, Hume is
thought to have spoken ‘‘longer and oftener and
probably worse than any other private member’’
(DNB, 1917, vol. 10, p. 231). When the accounting
practices within government departments were
again under scrutiny, later in that decade, Hansard
(2nd series, vol. 18, 1828, col. 443) reported as
follows: ‘‘another subject of importance,’’ declared
Hume, ‘‘which the right hon. gentleman’’, Robert
Peel,
alluded to, was one which deserved the best
consideration of a separate committee: he
meant the mode on which the public accounts
were kept in the Exchequers of England,
Scotland and Ireland. It would scarcely be
believed, that in the year 1828, the public
accounts in England, the land of accounts
and calculations, were kept in a manner simi-
lar to that of the savages of the Sandwich
Islands. They all recollected the manner in
which Robinson Crusoe kept his account of
the passing days, by cutting notches on a
piece of wood. Would it be believed that, in
the Exchequer of England, at the present day,
the same mode of notching a piece of wood,
called a tally, was observed, to mark a receipt
of money?
The Chancellor of the Exchequer (Rt. Hon.
Henry Goulburn), in time honoured fashion,
chose to focus on the form rather than the sub-
stance of the discussion: ‘‘the Hon. member has
greatly exaggerated the defects of the system,
when he had alluded to the marking of a stick
in the Exchequer. That practice was a relic of
barbarism, and has long been discontinued.’’
(Hansard, 2nd series. vol. 18, 1828, col. 446).
8
Certain members of the government were
nevertheless committed to the achievement of
more e?ective control of government expenditure.
Herries was brought into Parliament in 1823, as
member for the borough of Harwich, to join Lord
Liverpool’s government as Financial Secretary of
the Treasury (Herries, 1880, vol. 1, p. 119).
9
His
recommendations for retrenchment in order to
free funds for the reduction of the accumulated debt
are set out in a memorandum endorsed ‘‘Finance,
1827’’ which also pressed for the appointment of a
committee ‘‘to enquire into and report upon the
whole of our public expenditure’’ (Herries, 1880,
vol. 1, p. 144). It was therefore a combination of
radical pressure for retrenchment, and support for
such action from people within government keen
to combat pressure to maintain existing levels of
military expenditure,
10
that caused the Duke of
Wellington’s Tory government, that took o?ce in
1828, to appoint a parliamentary Finance Com-
mittee with Sir Henry Parnell as its chairman.
Parnell, ‘‘A disciple of Bentham and Ricardo
and zealous advocate of ?nancial reform’’ (Bartle,
1959, p. 113), castigated the existing public
accounting arrangements in On Financial Reform,
published in 1830. Through a resolution of these
problems, he believed, ‘‘a great retrenchment
might be made in all the o?cial establishments’’
and that the ‘‘public money would be [brought]
under a more secure custody’’ (Parnell, 1830, pp.
110–111). It was in pursuit of these ideals that
Parnell persuaded the Finance Committee to set
up a commission of experts whose duty it was to
7
Hume and David Ricardo were members of the 1822
Select Committee on Public Accounts.
8
The exact date of their complete discontinuance in use is
not entirely clear, but may have been a little later than the date
of this oral exchange (Baxter, 1989, pp. 81–82; Parker, 1984, p.
80; Robert, 1956, p. 85).
9
Herries served brie?y as Chancellor of the Exchequer in
1827, Master of the Mint, 1828–30, President of the Board of
Trade, 1830 and 1852, and Secretary at War, 1834–1835 (DNB,
1917, vol. 9, pp. 706–709).
10
In 1827, public expenditure totalled £56.1 million, of
which £29.2 million (52%) comprised interest and management
of the public debt, £16.7 million (30%) represented military
expenditure, and £10.2 million (18%) was accounted for by
civil and miscellaneous expenditure (BPP 1868–1869, xxxv,
Appendix No. 13, p. 149).
640 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
examine the wasteful system of public accounts
and to recommend improvements (Bartle, 1959, p.
113). Parnell and Herries, then Master of the Mint
and responsible for the sta?ng the committee,
nominated John Bowring
11
as one of the Com-
missioners, but this initiative was quashed when
the Duke of Wellington informed Herries that he
would ‘‘never consent to the appointment of such
a damned radical’’ (quoted in Bartle, 1959, p.
115). Peter Harriss Abbott’s substitute nomination
proved acceptable to the Lords of the Treasury
(Duke of Wellington, Henry Goulburn, and
Edward Granville Eliot, 3rd Earl of St. Germans),
and, on 29 April 1828, he was appointed, together
with Brooksbank and Beltz,
to enquire into and to state the manner in
which the public accounts are kept in the
several principal departments connected with
the receipt and expenditure of the money
granted by Parliament for the public service;
to ascertain the nature, description and pur-
pose of the several books used in each o?ce,
and to suggest such alterations as may appear
to be necessary, with a view of establishing a
more uniform system of keeping the public
accounts, as well as a?ording more satisfac-
tory and ready information as to the nature
and amount of the expenditure under each
head of service, and directing our particular
attention to the consideration as to how far it
may be practicable and advantageous to
employ the mercantile system of double entry
in keeping the public accounts. (BPP 1829,
vi(b), Appendix No. 1, emphasis added).
3. Ideological con?ict and the issue of ‘‘cheap
and e?cient government’’
Adam Smith (1776) is located by many as the
architect of laissez-faire economic theory, as sub-
sequently developed and moulded by classical
economists and Benthamites over the next cen-
tury. The theories formulated were designed ‘‘to
describe how an essentially uncontrolled economy,
in which the critical economic decisions are made
by individuals, each separately pursuing his own
interest, can nonetheless orderly and e?ciently do
society’s work’’ (Khan, 1970, p. 1). Such ideas
may be seen both as an attempt to theorise con-
temporary economic developments and as a means
of providing logic for the creation of a political
and economic climate within which such develop-
ments might ?ourish. Even those who remain
doubtful about the overall impact of such theories,
for example Lubenow (1971),
12
agree that eco-
nomic arguments were used in the nineteenth
century to press for cheap government and to help
create a strong and healthy economy. These
notions were embraced by politicians from both
sides of Parliament.
The political dimension is developed by Bellamy
(1990, p. 2) who de?nes contemporary philoso-
phies and certain state actions as an ‘‘attempt to
create a society of economically and politically
independent individuals whose qualities mirrored
their aspirations and interests’’. The liberal theor-
ists were therefore concerned to ‘‘come to terms
with the social, economic, and political implica-
tions of the emergent capitalist system’’. Further:
The aim of liberal politics consisted in allow-
ing the fullest range possible to these passions
in order to enable the maximum individual
liberty for the production and accumulation
of material wealth. Politics was subordinated
11
Bowring, a close friend and disciple of Jeremy Bentham
and someone who shared the concerns of Joseph Hume, advo-
cated the radical reform of government accounting (Parker,
1993). He subsequently found favour with the Whig govern-
ment returned in 1830, being appointed Secretary to the 1831
Commission on Public Accounts.
12
Lubenow (1971, pp. 26–27) believes that State action
moved forward under the in?uence of two overlapping models:
an idealised version of British custom and tradition within a
social and legal context that emphasised the rights of the indi-
vidual and the potential of autonomous action at local level;
and ‘‘an exercise in incrementalist politics’’ which consisted of a
series of legislative actions producing modi?cations to an
existing administrative structure rather than the implementa-
tion of any blueprint for political change based on a compre-
hensive and exhaustive policy analysis. For a debate in the
accounting literature on laissez-faire vs. incrementalism, see
Jones and Aiken (1995, 1999) and Walker (1996, 1999). The
concept of incrementalism is given speci?c application in
Walker (1998).
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 641
to the naturally harmonious causal properties
of social relations, so that liberalism came to
form the philosophical counterpart to laissez-
faire economics. (Bellamy, 1990, p. 2).
E?ective control over government expenditure
was therefore seen to be an essential precondition
for the creation of an economic climate conducive
to market-based developments and, as shown in
the previous section, politicians such as Bowring,
Herries, Hume and Parnell vigorously advocated
the pursuit of this goal.
The emergence of new political and economic
philosophies was associated with radical change in
the structure of society. In Perkin’s estimation
(1969, p. 176), the ‘‘most profound and far-reach-
ing consequence of the Industrial Revolution
[1760–1830] was the birth of a new class society’’.
The emergence of this new society ‘‘based on the
horizontal solidarities of class in place of the old
vertical connections of dependency or patronage’’
inevitable found the new capitalist middle class in
con?ict with the landed class who saw its hege-
mony under serious threat (Perkin, 1969, p. x; see
also chap. 6). The ‘‘old society’’, according to
Perkin (1969, p. 38), ‘‘was ?rmly based on the twin
principles of property and patronage’’. One’s place
in society was measured by the amount and nature
of one’s property. Indeed, private as opposed to
government patronage would almost inevitably be
based on property. Property thus enabled the
established society to renew itself in successive
generations through the purchase of positions—
for example, the commission of lieutenant-colonel
in the army could be acquired for £3500 in 1765
(Perkin, 1969, p. 44)—and through appointments
within its gift.
Existing alongside, and dovetailing with perso-
nal patronage, was political patronage so that ‘‘At
all levels, patronage, the system of personal selec-
tion from amongst one’s kinsmen and connec-
tions, was the instrument by which property
in?uenced recruitment to those positions in society
which were not determined by property alone’’
(Perkin, 1969, p. 45). A person’s position within
this society depended upon how many ‘‘friends’’
(s)he could ‘‘oblige’’ or be obliged by. Nineteenth-
century parliamentary reform is therefore seen by
Perkin as comprising ‘‘A struggle between the
class ideals, as an attack on property and patron-
age by capital and competition (supported by
expertise and selection by merit) from the one side
and by labour and co-operation from the other.’’
(Perkin, 1969, p. 310).
The emergence of a class society witnessed, dur-
ing the nineteenth century, the ‘‘Battle for the
State’’ and, eventually, ‘‘The triumph of the
entrepreneurial ideal’’, with a key feature of this
con?ict being ‘‘The battle for administrative
reform, to determine the machinery of executive
government and the method of recruiting the
administrators’’ (Perkin, 1969, pp. 308–309). The
reform of government, in common with the
reconstruction of British society, becomes appar-
ent, with hindsight, as the industrial revolution
gained momentum. According to Roseveare
(1969, p. 118), ‘‘The winter of 1779–80 saw the
beginning of a movement which was to produce
much more than an administrative revolution. It
was to introduce into public life a new morality
and to ?nance a new probity and into government
as a whole new standards of e?ciency and econ-
omy’’. The beginning of change was heralded with
the appointment, on 2 March 1780, of a commis-
sion of enquiry into public accounts, which pro-
duced fourteen reports over a period of seven
years (Roseveare, 1969, p. 120). These reports are
thought to have encouraged, in due course,
important changes in government recruitment,
organisation and administration (Cohen, 1941,
chap. 2; Roseveare, 1969, chap. 5).
In the move towards ‘‘The professionalization
of government’’ (Perkin, 1969, p. 319), Perkin sees
progress achieved by implementing the ‘‘indis-
tinguishable’’ ideals of the Benthamites and the
classical economists.
In the battles for morality, for public opinion,
and for political control of the State, the
professional ideal of a functional society
based on expertise and selection by merit was
almost interchangeable with the entrepre-
neurial ideal of a class society based on capi-
tal and competition. . .. The cheap and e?cient
government demanded by the entrepreneurial
ideal could only be provided by expert
642 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
professional administrators selected by merit.
As allies they conquered, achieving in the
creation of the modern bureaucratic adminis-
trative machine and the new civil service
quali?ed and ?nally selected by examination
a clearer-cut victory than in Parliamentary
Reform. (Perkin, 1969, p. 320, emphasis
added).
The wide range of reforms favoured by the pro-
fessional and entrepreneurial classes—whose ideals
remained closely aligned throughout the period
covered by this paper
13
—included ‘‘the abolition
of patronage and ‘corruption’, of amateurism and
ine?ciency, extravagance and waste, secrecy and
lack of accountability, and their replacement by
selection and promotion by merit, by professional
e?ciency, retrenchment and economy, publicity
and full ?nancial accountability’’ (Perkin, 1969, p.
320). To achieve the professional and entrepre-
neurial ideals, positive aspects were stressed:
‘‘selection of talent and expertise, e?ciency and
economy interpreted as the e?ective solution of
social problems and the abolition of waste arising
from social and administrative neglect’’ (Perkin,
1969, p. 321).
The movement for the adoption of ‘‘the mer-
cantile system of double entry’’, as the means of
improving government accountability by placing
its accounting system on a commercial basis, was a
signi?cant event in the quest for ‘‘cheap and e?-
cient government’’. We will see, however, that
established ideas concerning the role of account-
ability within a hierarchical society remained
in?uential in determining the design and funda-
mental content of the system of double entry
bookkeeping to be put in place.
4. De?ning Commissioners in con?ict
In 1828, as noted above, the Treasury appointed
three Commissioners to consider ‘‘how far it may
be practicable and advantageous to employ the
mercantile system of double entry in keeping the
public accounts’’. An examination of the back-
grounds of these Commissioners is an essential
pre-condition for our understanding of the serious
disagreement that ensued, between them, con-
cerning the version of double entry bookkeeping
to be recommended for adoption by Britain’s
central government.
Peter Harriss Abbott was born on the island of
St. Christopher in the West Indies in either 1774
or 1775 and, by the age of 28, was trading as a
merchant based in the City of London (Kent’s
Directory, 1812). Twelve years later, he is listed in
the Post O?ce London Directory as a commercial
agent and accountant working from 14 Walbrook.
In Bywater’s estimation (1985, p. 791), Abbott
was ‘‘the leading public accountant of the day’’.
Obituaries written to commemorate the death of
his famous former clerk, William Quilter (Bywa-
ter, 1985), probably formed the basis for this later
assessment. The eulogy printed in The Accountant
described Abbott as the ‘‘practical founder of the
profession of public accountants in this country’’
(17 November 1888, p. 754) while The Times, in
what was probably an over-critical assessment of
the state of public accounting 60 years earlier,
judged him to be ‘‘the only accountant of any
note’’ (obituary reproduced in The Accountant, 24
November 1888, p. 769).
Abbott had moved to Kings Arms Yard,
Moorgate, by the time he prepared his report for
the Lords of the Treasury and is listed as practis-
ing there in Robson’s London Directory for 1830.
Following Abbott’s appointment by Lord Chan-
cellor, Brougham, to the position of O?cial
Assignee to the Court of Bankruptcy, in 1831, two
of his former clerks, William Quilter and John
Ball, took over a practice subsequently described
as the ‘‘most extensive in England’’ (BPP, 1849, x,
minute 2,215; Bywater, 1985, p. 794). Central
government’s continued high regard for Abbott’s
expertise, as a public accountant, is revealed
through a series of subsequent engagements. Ser-
vices supplied to the Excise Department, for
example, involved ‘‘throwing’’ the accounts ‘‘into
double entry’’ and ridding it of ‘‘at least 700
volumes of books’’. Reforms which, in Abbott’s
estimation, yielded savings of ‘‘300,000l. a year in
the administration of the department’’ (BPP 1837,
13
The growing domination of the professional ideal from
about 1880 onwards is examined in Perkin (1989).
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 643
vii, minutes 1,311–13).
14
Abbott appears to have
continued to remain heavily involved in trading
activities, while practising as a public accountant,
which was perfectly legitimate, but also after tak-
ing on the public o?ce of O?cial Assignee, which
was not (Edwards, 2001, pp. 684–5).
An insight to Abbott’s economic and political
philosophies is contained in a pamphlet published
in 1839 entitled On the Public Debt. This is a
scathing attack on the governments of Great Brit-
ain, commencing with an expression of doubt
whether ‘‘Mr. Pitt could have extracted the large
sums he did from the pockets of the people [during
the Napoleonic Wars], had he not held out the
promise and prospect of repayment’’ (Abbott,
1839, p. 3). The interest on public debt accounted
for ‘‘three-?fths of the aggregate annual expendi-
ture’’ and, in Abbott’s judgement, the ‘‘onerous
taxation’’ required to service the public debt was
‘‘cramping, perhaps destroying altogether, the
energies of the farmer, manufacturer, and mer-
chant’’ (Abbott, 1839, p. 8). Even more serious
was seen to be the risk that ‘‘the master manu-
facturers’’ might be ‘‘ready to embark with their
men and machinery for other countries where
their honest industry, uncrippled by domestic
taxation, may have a fairer chance of success’’
(Abbott, 1839, pp. 30–31). Although perceived by
Wellington as less radical than Bowring, the
Treasury had clearly appointed someone who
proved to be a strident critic of government
expenditure levels. Indeed, Abbott may be located
as a middle class, evangelical businessman who
epitomised the ‘‘entrepreneurial ideal’’; a member
of what Brougham described to the House of
Lords in 1831
15
as ‘‘the middle classes, the wealth
and intelligence of the country, the glory of the
British name’’ (quoted in Perkin, 1969, p. 230).
Thomas Constantinus Brooksbank has been
identi?ed by Gray as someone who, following the
Treasury reforms of 1805, was able to take
advantage of the ‘‘ample scope [provided] for a
young man with energy and ability to carve out a
career for himself in the department’’ (Gray, 1963,
p. 314). The available evidence suggests that he
was descended from Stamp Brooksbank (b. 1694)
of Healaugh Manor, Yorkshire, who served as
MP for Colchester and Saltash and as a governor
of the Bank of England. Stamp Brooksbank had a
‘‘numerous family’’ including a second son, also
named Stamp (b. 1726) (Burke’s Peerage, 1967, p.
348), who enjoyed a highly successful career in the
civil service. Norris (1963, p. 211) informs us that
Stamp Brooksbank was the bene?ciary of a
‘‘patronage appointment’’ but proved to be one of
Whig Prime Minister Shelburne’s staunch suppor-
ters when endeavouring to reform the administra-
tion of the Revenue Departments.
16
Stamp
Brooksbank’s own son, Stamp (b. 1779), worked
with Thomas at the Treasury (Royal Kalendar). A
Treasury minute attributed to both Stamp and
Thomas Brooksbank an ‘‘intimate knowledge of
the duties of this [Treasury] department’’ based
on ‘‘their talents and long experience in public
business’’ (BPP 1843, xxx, pp. 585). In 1831, they
were each invited to submit ‘‘opinions’’ on the
appropriate quali?cations for clerks entering the
Treasury O?ce.
Thomas initially entered the Treasury in 1796 as
‘‘an extra clerk in the revenue department’’ (Gray,
1963, p. 314), and rose to become Principal Clerk
and Private Secretary to Spencer Perceval and
then to Lord Liverpool when those subsequent
prime ministers were at the Exchequer. He is listed
in the Royal Kalendar for 1805 amongst ‘‘other
clerks’’ in the Revenue Department of the Treas-
ury O?ce, subsequently being promoted to Assis-
tant Clerk and then holding the post of Senior
Clerk from 1811 to 1829. Following completion of
his work as a Treasury Commissioner, Brooks-
bank became Chief Clerk in the Revenue Depart-
ment; a position which, post-1805, carried no
responsibility for the general supervision of o?ce
business, leaving occupants ‘‘free to concentrate
16
Shelburne was determined to introduce ‘‘administrative
e?ciency’’ into the ‘‘national ?nancial system’’, receiving sup-
port from a small number of in?uential civil servants, including
Brooksbank, who ‘‘had taken a pessimistic view of the system
and its operation’’ (Norris, 1963, p. 202; see also p. 233).
14
Abbott was also called in to investigate a fraud at the
Greenwich Hospital (see below), engaged to introduce double
entry into a number of government departments and called to give
evidence before the Select Committee on the Accounts of Colonial
Receipt and Expenditure, 1837 (Edwards, 2001, pp. 679–81).
15
The year that Brougham appointed Abbott to the position
of O?cial Assignee.
644 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
on the work of their own departments’’ (Gray,
1963, p. 313).
At the same time as holding these principal
employments, Thomas Brooksbank bene?ted sig-
ni?cantly from access to additional engagements,
possibly involving little or no work, which
remained endemic to the contemporary political
scene. We know that, around the time of his
appointment as Commissioner, Brooksbank acted
as the Accounting Agent for the Bahamas (BPP
1831, x, p. 141) and as Agent and Paymaster of the
Out-pensioners at the Royal Hospital, Chelsea
(Royal Kalendar, 1830). The positions ?lled by
Brooksbank changed over time and one might
imagine that their ?nancial rewards generally got
better rather than worse. There are some ?gures
available for about a decade earlier which show
that, through additional appointments, he was
almost able to double the remuneration from his
main employment; in 1821/1822, he received
£1000 as Senior Clerk, £750 as Agent for Out-
pensioners at the Royal Hospital, Chelsea, and
£200 as a General Commissioner for the Lottery
O?ce (BPP 1822, xvii, Appendix Nos. 2, 8 and
15).
17
An insight to the social background that
placed Brooksbank in a position where he was
able to bene?t from such preferment is implicit in
his assessment of the educational standards
appropriate for Treasury sta?: ‘‘I at once unhesi-
tatingly give my opinion that the general Educa-
tion of a Gentleman is the best suited for all
purposes’’ (quoted in Roseveare, 1969, p. 163).
18
He lived latterly in fashionable Cadogan Place, o?
Sloane Street, Chelsea.
19
Little is known about Samuel Beltz who, given
the ordering of signatures to the joint reports,
appears to have been the junior member of the
partnership. He is described in the Royal Kalendar
as Senior Clerk in the foreign branch of the Com-
missariat Department of the Treasury before
being promoted to Chief Clerk in the Civil Service
Pay O?ce, by 1826, serving in that capacity
through to 1848.
20
We can thus see that Abbott had an entirely
di?erent career, and probably family, background,
from Brooksbank and Beltz at the time the three
were engaged to investigate the accounting proce-
dures appropriate for central government. Abbott
was a ‘‘commercial agent and accountant’’ who
possessed a close and continuing connection with
those engaged in trade and commerce. Brooks-
bank and Beltz, by way of contrast, were career
civil servants holding appointments that ensured
they were fully acquainted with government
accounting methods. The variety in their career
paths is suggestive of them belonging to quite dif-
ferent layers of early nineteenth century society. It
is known that many early practising accountants
developed their accounting skills working in busi-
ness (Matthews, Anderson, & Edwards, 1998, pp.
18–20) and Abbott certainly had a background
‘‘in trade’’. We also know that, within the civil
service, appointments relied heavily on patronage
until reforms inspired by the Trevelyan-Northcote
Report on the Organization of the Permanent Civil
Service, 1854, led to ‘‘the establishment of a
proper system of examination by a central board’’
(DNB, 1917, vol. 14, p. 640). The biographical
evidence presented above shows that Brooksbank
was born into a society where family connections
were an important factor in securing gainful
17
To provide some perspective for these ?gures, they may be
compared with Colquhoun’s 1803 estimates of the average
annual income of the aristocracy, £1206, middle ranks, £195
and lower orders, £39 (reproduced in Perkin, 1969, pp. 20–21).
18
The precise attributes speci?ed for an eighteen year-old-
candidate, by Brooksbank, were: ‘‘1. A su?cient knowledge of
Classical Literature to pass an Examination for matriculation
at Oxford—or for entrance to the Inner Temple. 2. Arith-
metic—including Vulgar and Decimal Fractions. 3. The 5 or 6
?rst Books of Euclid. 4. Algebra—inclusive of Quadratic
Equations.’’
19
Census records for 1841 (Family Records Centre) reveal
that he lived with his wife, daughter, two sons, Charles and
Theodore, who were respectively a clergyman and a barrister,
and three servants. Boyle’s Court Guide for April 1840 lists
amongst Brooksbank’s neighbours, as heads of their house-
hold, three titled ladies, nine military o?cers (two with knight-
hoods), one knight, three ministers, two barristers and two
surgeons.
20
It seems that the Pay O?ce was then combined with the
Paymaster General’s O?ce since most of the former depart-
ment’s sta?, other than the Chief Clerk and the Paymaster in
charge of the Civil Service Pay O?ce, were transferred to the
latter location. Beltz was at this time about 65 years of age and
might well have then retired since there is no further trace of
him in the Royal Kalendar.
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 645
employment, and we might expect that the same
was true of Beltz. Irrespective of whether our
conclusions about family backgrounds are entirely
correct, however, we know that by the time of
their appointments as Commissioners, one was
associated with the resurgent middle classes and
the others with the landed classes.
We are therefore able to infer, from our knowl-
edge of their divergent backgrounds and career
experiences, that the Commissioners would have
viewed the nature and purpose of government
accounting from contrasting ideological stand-
points, and we will show that this was indeed the
case. Such diversity had signi?cant implications
for the Commissioners’ assessment of the infor-
mation requirements of public o?cials, their view
of the way in which the bookkeeping system
should be designed to meet those needs, and the
Lords of the Treasury’s assessment of the utility of
the schemes put forward. More speci?cally,
Brooksbank and Beltz, as senior civil servants,
perceived themselves as responsible for defending
the traditional role of government accounting
against the radical changes advocated by the
champion of business methods and the entrepre-
neurial ideal.
5. Designing ‘‘the mercantile system of double
entry’’
It is generally accepted that double entry book-
keeping was developed out of prior record keeping
systems by banking and trading partnerships
operating in the Italian City States of Genoa,
Florence and Venice during the thirteenth and
fourteenth centuries (Lee, 1977). The impetus for
the subsequent di?usion and widespread adoption
of the Italian system has been the subject of study,
with relevant in?uences identi?ed as the level of
business activity, the size and complexity of orga-
nisational structures, the ready availability of
relevant literature, the socialization of capital, a
concern to maximise the rate of return on capital
employed, and the technique’s disciplinary poten-
tial (Bryer, 1993, 2000a, 2000b; Hoskin & Macve,
1986; Mills, 1994; Sombart, 1924; Yamey, 1949,
1964).
The Italian system was probably ?rst employed
in England by the London Branch of an Italian
?rm of merchants—the Gallerani company of
Sienna—between 1305 and 1308 (Nobes, 1994). It
was ?rst elucidated in printed form by Pacioli in
1494 and in Britain by Hugh Oldcastle in 1543
(Coomber, 1956). The adoption of the Italian sys-
tem was subsequently advocated through a bur-
geoning array of texts that appeared in Britain
post-1543 (Bolton, 1975, pp. 69–144), with wide-
ranging and sometimes excessive claims made by
their authors for the system’s contribution to the
e?cient conduct of business and domestic a?airs.
Double entry increasingly found favour amongst
trading and manufacturing companies during the
centuries that followed, and was embraced by
local government, particularly municipal corpora-
tions, during the nineteenth century. Double entry
was also adopted, early on, to help provide owners
of industrial companies with information relevant
for decision making (Edwards & Boyns, 1992).
Within the political and ideological context dis-
cussed above, the third decade of the nineteenth
century saw a ‘‘drift of ideas’’ (Clarke, 1982, p. 85)
from business to British central government con-
cerning the utility of double entry bookkeeping for
more e?ectively recording and reporting resource
?ows.
5.1. A modi?ed mercantile system of account
The Lords of the Treasury had expected to
receive a joint report from the Commissioners,
and the preparation of two reports—one by
Brooksbank and Beltz and the other by Abbott—
signalled fundamental disagreement concerning
the recommendations to be made. The report
signed only by Brooksbank and Beltz (B&B) was
submitted to the government on 9 February 1829.
The ‘‘Prefatory Remarks’’ set out, in the following
terms, what they judged to be the ‘‘General Prin-
ciples essential for the Public Accounts’’. These
articulated the need for the ‘‘System of the
Accounts’’ (BPP 1829, vi(a), p. 113) to ‘‘depend in
a great measure upon the nature, whether simple
or complex, of its pecuniary transactions’’ (BPP
1829, vi(a), p. 4). They also, signi?cantly in view of
the way the dispute was played out, attached par-
646 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
ticular weight to the need for the system, to allow
‘‘a facility of examination, and a ready means of
a?ording information on every transaction the
Accounts involve’’ (BPP 1829, vi(a), p. 4, empha-
sis in original).
B&B favoured the introduction of double entry
bookkeeping because the existing ‘‘plan’’ of public
accounts had proved de?cient due to the con-
siderable alteration in circumstances since its
implementation ‘‘in times remote from the pre-
sent’’ (BPP 1829, vi(a), p. 88). To make suitable
for government application, however, B&B con-
sidered the ‘‘mercantile system of double entry’’ to
require signi?cant amendment in terms of (1) the
structure and content of the books of account to
be used, and (2) the type of resource ?ows to be
measured. Looking ?rst at structure and content,
the principal books were to be a cash book, a bills
book, a journal
21
and a ledger kept on the princi-
ple of double entry ‘‘so as to furnish at all times
when required, either for the purpose of informa-
tion, or to prove the correctness of the accounts
and proceedings, a satisfactory [cash-based] BAL-
ANCE SHEET’’ (BPP 1829, vi(a), p. 89). Under
the mercantile system, according to B&B, all
transactions were
transcribed and technically arranged in the
Journal, and thence posted into the Ledger,
where nothing more is shown (besides the
dates, amounts and references to the Book
where the particulars are detailed) than the
titles of the accounts which form the coun-
terbalancing or double entries; and the
Account is still further involved in obscurity
by the frequent use of the word ‘‘Sundries’’,
as inclusive of two or more such titles (BPP
1829, vi(a), p. 89, emphasis added).
B&B did not consider a ledger designed along
these lines su?cient to meet the information require-
ments of public o?cials for the following reasons:
A Public O?ce, which is continually called
upon for information upon a variety of
subjects, should possess the readiest possible
means of furnishing that information; and to
this end, the ledger should be made to contain
a condensed, but more circumstantial detail
of the proceedings than is usually a?orded
under the mercantile system. (BPP 1829,
vi(a), p. 89).
The ‘‘more circumstantial detail’’ included the
date, the name of the party and the description of
the service. Additional advantages claimed for
their scheme were
that inaccuracies, and even frauds, may be
much more easily prevented or detected by
the use of the greater detail recommended,
than when nothing more is immediately pre-
sented to the eye than entries under such brief
descriptions as ‘‘Sundries,’’ or the mere titles
or headings of accounts. (BPP 1829, vi(a),
p. 89).
Such detail was judged to supply for the public
o?ce the same security as ‘‘the vigilance of the
principal’’ (BPP 1829, vi(a), p. 89) ensured in the
counting-house. It was further argued that this
modi?cation to the Italian system would not result
in an overall increase in work-load because post-
ings could be made directly from the cash book to
the ledger rather than being routed through the
journal as Abbott appeared to prefer. The way in
which the books recorded relationships between
accounting o?cers and the State, and how they
di?ered from those maintained by commercial
organisations, was described in the following
words.
The periodical accounts of the sub-accoun-
tants to a public department are mere money
accounts, containing on opposite sides a sim-
ple detail of the receipts and payments in the
order in which they occur. The account-book
usually termed a JOURNAL must, under the
proposed arrangement, be almost exclusively
appropriated for the entry of those accounts,
and therefore partake essentially of the nature
of the CASH BOOK, . . . It [the journal] is not
wanted in a public o?ce for adjusting the
21
The cash book, bills book and journal represent sub-
divisions of the all-inclusive journal advocated by Abbott.
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 647
various rami?cations of a PROFIT AND
LOSS account, the complicated a?airs of a
PARTNERSHIP, or the multifarious inci-
dents of a wide ?eld of COMMERCIAL
ADVENTURE. The o?cial Journal is a
book of very simple description, in fact, a
miscellaneous cash-account, capable of being
constructed with peculiar advantage, as is
now attempted, upon precisely the same
principle of arrangement as the Cash Book
and Ledger. (BPP 1829, vi(a), p. 119)
The application of double entry bookkeeping to
government ?nancial a?airs was also, as indicated
above, considered to require amendment to the
measurement procedures employed. B&B believed
that, with a single exception, the cash-based
method of accounting should be retained in pref-
erence to the accruals-based system employed by
business. Where a department undertook manu-
facturing activities (this comment seems to have
applied principally, and perhaps only, to the dock-
yards of the Navy Department), B&B accepted
that it was ‘‘indispensably necessary for the due
regulation of its proceedings that it should possess
the means of ascertaining as accurately as possible
the actual cost to the Public of the article pro-
duced, with a view to a comparison of such cost
with the price at which it might be obtained ready
fabricated from the contractor’’ (BPP 1829, vi(a),
p. 93). Thus they were willing to approve ‘‘a
regular Manufacturer’s Journal and Ledger’’ so
that ‘‘a perfectly accurate account of the expenses
attending the manufacturing processes, and a
tolerably accurate statement of the value of
the whole stock on hand are obtained’’ (BPP
1829, vi(a), pp. 94–95).
22
B&B even agreed
that ‘‘the rigid application of the mercantile sys-
tem of double-entry’’ to public accounting gen-
erally was achievable, but they considered such a
course to be entirely inappropriate (BPP 1829,
vi(a), p. 94).
5.2. A view from the business world
Peter Harriss Abbott entered the debate through
a separate report dated 28 February 1829. The
absence of co-operation between the Commis-
sioners followed B&B’s discovery that Abbott had
independently investigated criminal irregularities
at the Royal Greenwich Hospital, a quasi-govern-
mental institution (BPP 1830, xxix, 5).
23
Abbott
had introduced, at Greenwich, an accruals-based
system of double entry bookkeeping that incorpo-
rated a fully detailed journal and a summarised
ledger. B&B formulated a detailed critique of the
utility of this system for a public o?ce and of the
quali?cations of a ‘‘professional Accountant’’
(BPP 1829, vi(a), p. 101) to perform the task.
Their dismissal of the scheme introduced at
Greenwich Hospital as being ‘‘complex, incon-
sistent, confused and obscure’’ (BPP 1829, vi(a), p.
102) set the tone for a full and frank exchange of
views between the Commissioners. Abbott con-
curred with B&B’s assessment of the legitimacy of
double entry bookkeeping as the basis for keeping
the public accounts, but then went on to make the
case for ‘‘the universal adoption of the mercantile
system in the various departments of the Govern-
ment’’ (BPP 1829, vi(b), p. 21). Modi?cations to
the mercantile system of accounts such as ‘‘those
recommended by Messrs. Brooksbank and Beltz
(and which I make no doubt have repeatedly
occurred to and been as repeatedly rejected by
men of account)’’, argued Abbott, ‘‘must end, if
adopted, in disappointing every expectation of
bene?t to be derived from this commission’’ (BPP
1829, vi(b), p. 154). Particular attention was
devoted to justifying the adoption of the compre-
hensive journal, for which the following advan-
tages were claimed:
23
B&B complained that they had received ‘‘no intimation
whatever from Mr. Abbott, although at the time associated
with us in the task of enquiring into and suggesting improve-
ments in the mode of keeping the public accounts, or from the
directors [of Greenwich Hospital], of the intention of immedi-
ately introducing in this establishment a new system of book-
keeping, so as to enable us to submit our opinion upon the
subject, or to contribute our assistance during the process; and
on our visit to the hospital we found the reformed system
already in operation’’ (BPP 1829, vi(a), p. 101).
22
This system is referred to as ‘‘Store Accounts’’ (BPP 1829,
vi(a), p. 93) in contrast with the system of ‘‘Cash Accounts’’ on
which the principal books of the public departments were to be
framed (BPP 1829, vi(a), p. 89).
648 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
Where a Journal is employed, the motives,
at the instant of the inscription of each
transaction, are recorded. A Journal, in this
light, is most essential in a Public Depart-
ment, where the heads of o?ce are fre-
quently removed and replaced by other
individuals; but it has intrinsic properties in
a perfect system of account, that are dis-
regarded, only, where they are not inti-
mately known. (BPP 1829, vi(b), p. 4)
[A] journal enables the ledger-keeper to
correct errors that may creep in, or to make
alterations that may be needful in the
accounts, without having recourse to era-
sures or obliterations. (BPP 1829, vi(b), p. 4).
A journal is most useful at the annual bal-
ancing of the Ledger. . .[which]. . .must
include not only the money actually expen-
ded, but also the liabilities of the establish-
ment. (BPP 1829, vi(b), p. 5)
The ?rst two requirements were broadly satis-
?ed under the version of double entry favoured by
B&B; detail was available elsewhere (in either the
cash book or the ledger), and the use of a journal
to make amending entries was explicitly recog-
nised. But common ground was overlooked in a
dispute which degenerated into a determination to
acknowledge no merit whatsoever in the oppo-
nent’s system.
The last of Abbott’s three points draws atten-
tion to a signi?cant, and recurrent, problem in
public accounting, i.e. the often massive delays
that occurred in closing departmental accounts
with the result that departmental a?airs were often
audited and reported to Parliament many years
after the end of the period that they covered. With
government activity routinely transacted by public
o?cials personally handling the related cash ?ows,
there was a clear ?nancial incentive for them to
fall well behind with their accountability when in
possession of balances due to the Exchequer. Lord
Henry Petty, then Chancellor of the Exchequer,
informed the House of the following in 1806:
It will surprise the House and the public to
hear that there are accounts not passed to the
amount of £167,000,000—that there are
accounts not proceeded in the amount of
£58,000,000—that there are twenty-one years
pay-o?ce accounts to the amount of
£150,000,000 not delivered in—that there are
naval accounts in the same situation in the
amount of £80,000,000, and, to sum up the
whole, that the arrears make the enormous
sum of £455,000,000 of public money unac-
counted for, that is to say a larger sum unac-
counted for than composes the whole of the
national debt. (Quoted in Cohen, 1941, p. 48).
Abbott drew attention to the fact that adoption
of accruals accounting would enable the books to
be closed soon after the end of an accounting
period by making provision through the journal
for any outstanding liabilities.
24
Unde B&B’s
cash-based system, Abbott argued, the ‘‘annual
Balance’’ would continue to be ‘‘needlessly deferred’’
so that ‘‘all sums due, but not paid at the close of
the year, may, when paid, be introduced before the
books are balanced’’ (BPP 1829, vi(b), p. 151).
25
The areas of di?erence between the protagonists
are highlighted through the opportunity given
B&B to respond to each of the 24 paragraphs of
Abbott’s general report, with their observations
presented in columnar format amongst the printed
papers (BPP 1829, vi(b), pp. 143–155). Their
divergent attitudes concerning the measurement
basis to be adopted—cash or accruals—and the
degree of detail to be provided in the journal vis-a` -
vis the ledger are there clearly portrayed (BPP
1829, vi(b), pp. 146–147).
Abbott drew attention to the inconsistency
between B&B’s commitment to a ‘‘UNIFORM
SYSTEM OF ACCOUNT’’ (BPP 1829, vi(a), p.
88) and their acceptance of the need for ‘‘two sets
of books, on di?erent principles’’ within the same
24
‘‘These inconveniences are remedied by the use of the
mercantile journal, and by the adoption of an expedient known
to all practical book-keepers and embraced by the Italian sys-
tem.’’ (BPP 1829, vi(b), p. 151)
25
Cory (1840, pp. 170–1) informs us that, over a decade after
the dates of the Commissioners reports, the annual Army
accounts typically remained open for 8–10 years. The Admir-
alty is cited as the model to be emulated as it left open its
accounts for just six months beyond the 31 March accounting
date.
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 649
department; accruals accounting for the dock-
yards and cash accounting for the remainder of
the Navy Department (BPP 1829, vi(b), p. 144).
Given his claim to have successfully applied ‘‘the
mercantile system’’ to one public activity (Green-
wich Hospital), he trumpeted his system as ‘‘uni-
versally applicable’’ and that of B&B as ‘‘not so’’
(BPP 1829, vi(b), p. 144). B&B’s response was
that, in computing the cost of articles manu-
factured, in the ‘‘manufacturer’s ledger’’, it is pos-
sible to be ‘‘more concise’’ because ‘‘we have not
to guard against the risk of fraud, as in the more
important matter of the cash transactions’’ (BPP
1829, vi(b), p. 144). Given Abbott’s familiarity
with the a?airs of public departments, they con-
tinued, he must be ‘‘aware of the impracticability
of combining for any useful purpose the cash and
store transactions, so as to produce a regular
pro?t and loss account after the manner of mer-
chants; and yet it would seem that he must have
had such an arrangement in view’’ (BPP 1829,
vi(b), p. 144).
Abbott further argued the case for full detail in
the journal and summary headings only in the
ledger (as epitomised by use of the term ‘‘sun-
dries’’) on the grounds that ‘‘it is this condensation
in the journal that renders the mercantile ledger so
far more compendious than the o?cial ledger of
Messrs. Brooksbank and Beltz’’ (BPP 1829, vi(b),
p. 146). Use of the term ‘‘sundries’’ was required,
he believed, ‘‘unless great additional labour should
be considered a fair price for its rejection’’. B&B
considered the price worth paying with the term
‘‘sundries’’ rejected on the grounds that ‘‘it would
be more advantageous, on many grounds, to
[provide] detail in that book’’ (BPP 1829, vi(b), p.
147). Such grounds included a concern that,
otherwise, the ledger accounts could not be
understood ‘‘without constantly referring to the
journal’’ (BPP 1829, vi(b), p. 146).
The underlying signi?cance of the Commissioners’
contrasting views is explored in the next section.
6. Explaining contrasting bookkeeping designs
The essence of the disagreement between Abbott
and B&B came down to di?erent perceptions of
the core purpose of the government accounting
system. Re?ecting his business background,
Abbott saw ‘‘the mercantile system of accounts’’
providing the means of inducing a commercial
manner when managing the ?nancial a?airs of
British central government. He located the pur-
pose of accounting as being to ensure that indivi-
dual transactions ended up in the appropriate
account in the ledger, with the detail of how and
why the transaction a?ected that account unim-
portant. B&B, on the other hand, believed that
ledger accounts should also contain a visible
record of personal accountability.
6.1. Maintaining personal accountability
Bookkeeping treatises published from the six-
teenth century onwards (see, for example, Jack-
son, 1956) were written primarily for the business
community and oriented towards the role for
double entry advocated by Abbott. That is, the
principal emphasis was placed on which accounts
to credit and which to debit for particular trans-
actions. The so-called ownership theory (Jackson,
1956, pp. 306–312) saw accounts mainly as
mechanisms for recording the e?ect of transac-
tions on the balance of assets and liabilities, pro?t
and loss (p. 309). In such circumstances, the pro-
vision of detail in the ledger was unimportant. The
trend within the business world towards the pro-
vision of less detail in the ledger and a greater
emphasis on ?nancial reports to assess perfor-
mance by product, by department or of the
individual, was naturally seen, by some, as inap-
propriate for the government sector with its
emphasis on the personal accountability of the
individual rather than pro?t or loss, and on com-
pliance with parliamentary decisions concerning
revenue and expenditure rather than performance.
The material presented to the Treasury by B&B
naturally demonstrates a close concern with the
underlying personal accountability of o?ce-hold-
ers in a hierarchical system where the objective
was to demonstrate that payments had validly
taken place within delegated powers. They focused
on the need for o?cers to remain accountable to
their superiors and to Parliament by recommend-
ing a form of accounts which, while having the
650 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
characteristics of double entry, was designed to
give a narrative—a ‘‘running account’’ or
‘‘account current’’—of how ?nancial responsi-
bilities had been discharged. This was an under-
standable priority given that most government
departments continued to employ charge and dis-
charge accounting at this time.
B&B were thus predisposed towards retention of
the essential features and attributes of charge and
discharge accounting within the planned new sys-
tem of accounting. The literature shows these
concerns to have been shared in other sectors of
the economy including situations where the social
equals of B&B interfaced with business opera-
tions. Napier (1991) has revealed the concern to
retain a clear record of individual accountability
on the Bute estate in Glamorgan, south Wales, as
the transition from charge and discharge account-
ing to double entry bookkeeping occurred around
the time-period covered by this paper (see also,
Jones, 1985, chap. 2). Similar developments
occurred within local government (Coombs &
Edwards, 1996, chap 4). For example, although
the City of Bristol adopted double entry book-
keeping in 1785, the principal ?nancial statement
prepared for the year ending 31 August 1837 was
an ‘‘account current’’ that continued to be cap-
tioned: ‘‘Thomas Garrard, Treasurer of the City
and Borough of Bristol and County of the said
City in account with the Mayor, Aldermen and
Burgesses of the said City and Borough for the
year ending 31 August, 1837’’ (reproduced in
Coombs & Edwards, 1996, p. 38, p. 44).
One ?nds in the submissions made by B&B
ample explicit evidence of their commitment to
personal accountability:
the ‘‘Account Current,
26
is indispensable, as
the foundation of any other Account, and
as the only correct mode of striking a Bal-
ance’’ (BPP 1829, vi(a), p. 6).
the ‘‘Explanatory Ledger’’ is to be pre-
ferred because ‘‘inaccuracies, and even
frauds, may be much more easily prevented
or detected by the use of the greater detail
recommended’’ (BPP 1829, vi(a), p. 89).
27
‘‘the head of the Department should not be
precluded by the obscurity of the entries
from forming a ready judgement, by a per-
sonal inspection of the books, of the state
of the accounts, and of the care and ?delity
with which they are conducted’’ (BPP 1829,
vi(a), p. 90).
The focus on the personal accountability of the
individual may also be inferred from the statement
that ‘‘the Ledger Accounts are to consist princi-
pally of those forming heads of the Estimates
and the Accounts with Sub-accountants—the
Accounts with Contractors, O?cers on full and
half-pay and other persons not Sub-accountants’’
(BPP 1829, vi(a), p. 111).
We can therefore see how ‘‘the mercantile sys-
tem of double entry’’ label may have been accep-
table to both parties as standing for systematic
and ‘‘proper’’ accounting, but it is equally clear
that they interpreted the content and purpose of
the system in fundamentally di?erent ways. The
result is that, from the perspective of ‘‘giving an
account’’, B&B’s comments concerning the use of
‘‘sundries’’ gains substance that is not otherwise
immediately apparent. Within commercial
accounting, what matters is the total to be debited
or credited to a ledger account, as the aim is to
determine the balance; in the civil service, the
priority is to provide a narration that ‘‘sundries’’
palpably fails to do.
28
27
The emphasis on personal accountability and a detailed
record is also consistent with the need to check for evidence of
the corruption that was endemic in the old society.
28
The dispute between the two parties was re?ected upon by
a contemporary, Isaac Preston Cory, fellow of Caius College,
Cambridge, barrister at law, and a simple compromise pro-
posed (Cory, 1840, pp. 95–97). In Cory’s view, the accessibility
of relevant information could be conveniently achieved by
maintaining a journal along the lines preferred by Abbott and
the retention of narratives in the ledger along the lines advo-
cated by B&B.
26
Napier (1991, pp. 167–170), demonstrates the key role of
the ‘‘account current’’ in the accountability of Edward Priest
Richards, agent to the second Marquess of Bute between 1814
and 1948.
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 651
6.2. Public or government accountants
The resolution of the dispute concerning the
design of the system of government accounting
was seen to have signi?cant implications for the
type of person quali?ed to operate the new system.
Abbott accused his colleagues of ‘‘accommodating
their system to the capacity and convenience of
the individuals [presently] employed, rather than
suiting it unconditionally to the exigencies of the
public service’’ (BPP 1829, vi(b), p. 143). Further,
‘‘it is for attempting to perpetuate the system
adopted by public o?ces, of acting upon plans
framed to their peculiar transactions, that the o?-
cial plan of account recommended by Messrs.
Brooksbank and Beltz appears to me so repre-
hensible’’ (BPP 1829, vi(b), p. 145). Abbott argued
that action required to ‘‘e?ect any serious reform
in the present very defective mode of keeping the
Public Accounts’’ must inevitably involve hard
decisions, and B&B were accused of sycophantic
behaviour:
this di?culty must neither be disguised nor
misrepresented; still less ought the object of
this commission to be compromised by a
complaisant and courtly, not to say disin-
genuous desire to render the reform con-
templated palatable to the party to be
reformed. (BPP 1829, vi(b), p. 143).
Abbott also charged B&B with underestimating
the di?culties involved in reforming public
accounting: ‘‘book-keeping is not an art that can
be learned in a very few days, as Messrs. Brooks-
bank and Beltz seem to suppose’’ (BPP 1829,
vi(b), p. 143). He was adamant that the reforms
advocated could not be ‘‘carried into e?ect with-
out the introduction of one or two practical
accountants into each department of the Govern-
ment’’ (BPP 1829, vi(b), p. 143); ‘‘the practical
knowledge and experience of accounts acquired in
mercantile intercourse, or, to speak candidly, in
the counting-house,
29
appear to me indispensable
in introducing any good system into the public
o?ces’’ (BPP 1829, vi(b), p. 143). In addition to
Greenwich Hospital, Abbott had already installed
a ‘‘new system’’, under experiment, at the Navy
O?ce, for which he claimed the following advan-
tages: it ‘‘is understood by every man of account,
consequently the ability to detect fraud or error in
the accounts is not con?ned to individuals
belonging to the Department’’ (BPP 1829, vi(b), p.
21).
Abbott’s recommendations for meeting the
accounting manpower requirements of public o?-
ces were rejected by B&B: ‘‘we consider it to be
not only unnecessary, but highly inexpedient to
employ counting-house book-keepers from the
City (the ‘‘practical accountants,’’ alluded to by
Mr. Abbott) to introduce a system of book-keep-
ing in the public o?ces’’ (BPP 1829, vi(b), p. 143).
The grounds for their intransigence were two-fold:
‘‘besides being insu?cient for the objects to be
accomplished, [the accounts] would be, generally,
unintelligible to the o?cers of Government.’’
(BPP 1829, vi(b), p. 143). The civil servants also
rejected the allegation of disingenuity and
explained their objective of devising a suitable
system, consistent with the accounting expertise
presently available within public o?ces, in the
following words:
we should have ill deserved the con?dence of
their Lordships, if we have lent ourselves to
the views of our colleague, who has dis-
covered what appeared to us to be an extra-
ordinary anxiety to pave the way for the
introduction in the public o?ces, of a new set
of individuals; and to this end to deprecate
the persons now employed, of whose capacity
and attainments he has had no means of
forming a correct judgement. (BPP 1829,
vi(b), p. 143).
It is worth noting that disagreement about whe-
ther ‘‘a new set of individuals’’ should be brought
in to do the work continued long beyond the date
covered by this paper. For example, in discussions
on the form of the army’s accounts, in 1844, Sir
Henry Parnell argued that the introduction of
double entry bookkeeping ‘‘is a business which
29
For information on the nature and role of the counting
house, see Anderson (1976), Lockwood (1989), Previts and
Sheldahl (1977).
652 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
cannot be adequately accomplished without
employing a person who has had not only long
experience as an accountant, conversant with the
practice of the double-entry system, but who is
also possessed of a thoroughly scienti?c knowl-
edge of the principles of the system’’ (BPP 1844,
xxxii, p. 34). Such ideas continued to be resisted
by career civil servants with the leading Victorian
?nancial administrator, William Anderson, con-
vinced that ‘‘the attempt to introduce the system
without the aid of book-keepers from the city
would be successful; or, in other words, that there
is ample talent in each o?ce; and su?cient public
zeal, to carry forward the plan with complete suc-
cess, without deranging the existing establishments
by introducing a new class of persons into the
service’’ (BPP 1844, xxxii, p. 39).
7. Treasury verdict
The Commissioners’ con?icting reports were
duly considered by Lords Wellington, Goulburn
and Eliot whose judgement is contained in a
Board of Treasury minute dated 14 July 1829
(BPP 1831, xiv, p. 17). In their judgement, ‘‘this
di?erence of opinion has reference rather to the
manner of applying the mercantile system to the
accounts of the public departments, than to the
principle of the mercantile system, or to the expe-
diency of its adoption’’ (BPP 1831, xiv, Appendix,
p. 17). They articulated the di?erence between the
Commissioners as follows:
that while two Commissioners judge it expe-
dient to select only such of the rules observed
in the merchants’ counting-house as appear
to be perfectly consistent with the nature and
course of public business, Mr. Abbott con-
tends that the mode of regulating the
accounts of a merchant should, without var-
iation, be adopted in the o?ces of Govern-
ment. (BPP 1831, xiv, p. 17).
Given that the Commissioners’ reports were
evaluated by the Lords of the Treasury, it is per-
haps unsurprising that they should have favoured
the scheme advocated in the majority report pre-
pared by two Treasury employees. Nevertheless,
the Lords of the Treasury pinpointed a funda-
mental ?aw in Abbott’s uncompromising advo-
cacy of his version of ‘‘the mercantile or Italian
system of double entry’’ and the total unwilling-
ness to countenance ‘‘any material deviation from
that system’’ (BPP 1829, vi(b), p. 153).
It is known that the practice of merchants
and others in the arrangement of their
accounts is not uniform; the general mer-
chant, the less extensive dealer, the manu-
facturer, each keep their accounts in a
peculiar manner, adapted to their own busi-
ness; nor can any just reason be assigned why
the accounts of a public department, di?ering
as they do in many respects from every
branch of mercantile business, should not
have a peculiarity of system suited to their
particular nature and object. (BPP 1831, xiv,
p. 17).
The Treasury decided that the new system
should be introduced gradually and that ‘‘it is
probable that certain modi?cations may be sug-
gested in the several departments’’, which would
prove perfectly acceptable provided that ‘‘they in
no respect deviate from the general principle’’
(BPP 1831, xiv, p. 18). To facilitate the imple-
mentation of change, B&B were instructed to
‘‘place themselves in communication with the sev-
eral departments concerned, and a?ord them,
either in person or in writing, every necessary
information’’ (BPP 1831, xiv, p. 18). A further
acknowledged constraint on the implementation
of accounting change was the availability of per-
sonnel possessing ‘‘a thorough knowledge of
book-keeping by double-entry’’ (BPP 1831, xiv, p.
18). The Treasury did not see the recruitment of
public accountants as the appropriate solution.
Instead, they decided to permit postponement of
the adoption of the new system until the com-
mencement of the following ?nancial year, so
‘‘that time far more than su?cient will be a?orded
for their instruction’’ (BPP 1831, xiv, p. 18).
The ?nal episode in the dialogue between the
Commissioners occurred about 6 months later.
Abbott wrote to the Treasury on 27 November
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 653
1829 trying, as he saw it, to set the record straight.
He protested that ‘‘your Lordships have been
induced to look upon my labours in the commis-
sion with a less favourable eye than would other-
wise have attended them’’, and attributed this to
‘‘the wilful misrepresentations of others’’ and to
their Lordships ‘‘partial acquaintance only with
some of the points in controversy’’ (BPP 1830,
xxix, p. 2). He also made a number of references to
the more e?ective ‘‘diplomacy of my opponents’’
(BPP 1830, xxix, p. 10), and it certainly does seem
that he was out-manoeuvred, but the force of his
argument probably su?ered from the employment
of rather stronger language than one might expect
in a considered submission made to the heads of a
government department. B&B were favoured with
the opportunity to answer Abbott’s complaints
and were able to cite triumphantly the following
allegations made by him: ‘‘wilful misrepresenta-
tions’’—‘‘ridiculous distrust’’—‘‘hostile intentions’’
—‘‘prejudices from super?cial knowledge’’—
‘‘interpretations ingeniously made’’—‘‘exhibition
of tact and diplomatic address’’—‘‘unfairness’’—
‘‘animosity’’—‘‘want of candour’’—‘‘want of
courtesy’’ (BPP 1830, xxix, p. 15).
It is impossible, and probably unnecessary, to
allocate accurately the balance of responsibility
between the Commissioners for their failure to
produce a joint report. B&B were Treasury o?-
cials, however, and the report was being prepared
for their masters. From a tactical point of view,
therefore, it would appear to have been important
for Abbott to press his views, if at all possible,
through a general report. While some of the alle-
gations by Abbott verge on paranoia, there are
signs that his two opponents were treated in a
privileged manner. The short general report pro-
duced by Abbott—described as a ‘‘Memorandum.
On the Plan of Keeping the Public Accounts’’—
was printed, as noted earlier, with the observa-
tions and criticisms of B&B placed alongside (BPP
1829, vi(b), pp. 143–155). Later in the year, when
Abbott addressed his letter of complaint to the
Lords of the Treasury, B&B were again given the
opportunity to analyse and criticise his submission
with their ?ndings once more presented and
printed in columnar format (BPP 1830, xxix, pp.
2–15).
8. Concluding remarks
The catalysts for the imposition of more
demanding accounting regulations on British
companies during the nineteenth century were
often mismanagement and fraud. Explicit evidence
of fraud in central government had occurred at
Greenwich Hospital, and the risk of this happen-
ing under the existing system of record keeping
was undoubtedly a matter that concerned all three
Commissioners. It is also the case that, even in the
absence of fraud, accounting practice within cen-
tral government was considered de?cient in
important respects, with radicals such as Joseph
Hume, Sir Henry Parnell and John Bowring
pressing for its fundamental reform. The 1828
report of the Finance Committee, chaired by Par-
nell, expressed concern with the government
bookkeeping system’s failure to track the move-
ment of cash in an e?ective manner. We have also
seen expressed recurrent concerns with the serious
delays in reporting to Parliament the ?nancial
e?ects of transactions undertaken and in returning
unspent money to the Exchequer. Such short-
comings rendered it di?cult for o?cials and Par-
liament to assess the State’s ?nancial progress and
position and almost inevitably increased the risk
of undetected inaccuracies, deception and fraud. It
was in response to these kinds of concern that the
terms of reference issued to the three Commis-
sioners in 1828, on the advice of the Finance
Committee, directed ‘‘particular attention to the
consideration as to how far it may be practicable
and advantageous to employ the mercantile sys-
tem of double entry in keeping the public
accounts’’.
The 1828 Finance Committee’s support for the
adoption of ‘‘the mercantile system of double
entry’’ is unsurprising given its chairman’s respect
for this technique (Parnell, 1830, chap. 11), while
acceptance amongst heads of government re?ected
a growing belief in the potential contribution of
up to date accounting methods in achieving
‘‘cheap and e?cient government’’. The Lords of
the Treasury appointed the Commissioners towards
the very end of Britain’s industrial revolution; a
time that had seen the growth of business activity
and organisations through the exploitation of key
654 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
technical innovations and factory-based organisa-
tion of work. The development of o?ce procedures
in the counting house included the more wide-
spread adoption of double entry bookkeeping to
record and report the rising number and range of
transactions undertaken, as businesses grew in size
and complexity, as well as enabling the implementa-
tion of more e?ective internal control procedures
over the actions of a burgeoning o?ce sta?. It was
believed that central government could bene?t
from sharing in the potential of double entry book-
keeping as a means of providing better ?nancial
control and as a mechanism for generating more
extensive and reliable ?nancial data at a time
when a need for the accumulation of facts and
statistics to better inform government action was
increasingly recognised (Lubenow, 1971, p. 16;
Parker, 1993, p. 73; Perkin, 1969, pp. 326–368).
The Commission appointed to conduct the
inquiry comprised a leading public accountant,
experienced in commercial a?airs, and two senior
civil servants expert in the accounting practices of
government departments. Following their dis-
agreement and the receipt of separate reports by
the Lords of the Treasury, the establishment came
down unequivocally in favour of B&B. Why did
Abbott fail?
There were three matters at issue. The ?rst was
whether double entry bookkeeping should be
adopted. Here there was unanimity amongst the
Commissioners. The terms of reference from the
Lords of the Treasury anticipated the adoption of
‘‘the mercantile system of double entry’’, signal-
ling a predisposition in favour of change and a
recognition that the system of charge and dis-
charge accounting was failing. There had been no
recent rise in expenditure levels to serve as a cata-
lyst for accounting change (BPP 1868–1869, xxxv,
pp. 148–151), but the existing system had revealed
inadequacies for some time, with in?uential and
informed critics a constant source of embarrass-
ment to the government.
The second question centred on the version of
double entry bookkeeping to be adopted.
Although B&B’s plan required changes to be
made, it is equally certain that their scheme built
on the prevailing accounting arrangements within
at least some of the departments under investiga-
tion. Their reworking of the mercantile system of
double entry to produce a stewardship-oriented
version awarded high pro?le to the perceived need
to retain a full record of personal accountability
within the ledger. Abbott palpably failed to
demonstrate the speci?c advantages of his busi-
ness-oriented system of double entry bookkeeping.
Rather than argument, Abbott relied on emotive
language to demand the introduction of ‘‘the most
perfect system’’ known to business (BPP 1829,
vi(b), p. 144). Abbott’s presentations to the
Treasury were also marked by dismissive assess-
ments of the system presently in force, of the pro-
posals for change made by B&B, and of the
accounting expertise available within government
departments. It is reasonable to assume that these
allegations would require incontrovertible sup-
porting evidence if they were to ?nd favour with
B&B’s superiors. No such evidence was presented.
The third question was whether operation of the
new system should be the responsibility of
accountants from business or from the govern-
ment sector. The proposals put forward by the
‘‘professional accountant’’, as B&B described
Abbott, anticipated the employment of accoun-
tants from the business sector at either or both of
two levels. On numerous occasions, there was the
explicit statement of the need to employ ‘‘men of
account’’ in government departments, with even
the level of involvement measured as ‘‘one or two
practical accountants into each department of the
government’’. There is the further implication that
the government accounting system might best be
the subject of audit by ‘‘men of business’’, with
Abbott’s system possessing the virtue that it ‘‘is
understood by every man of account, conse-
quently the ability to detect fraud or error in the
accounts is not con?ned to individuals belonging
to the department’’. It is unsurprising that B&B
should resist these threats to the domain of gov-
ernmental bookkeepers and accountants through
‘‘the introduction in the public o?ces, of a new set
of individuals’’.
The con?ict of ideologies that underpinned the
dispute surrounding the second and third ques-
tions was no mere intellectual exercise, ‘‘[f]or
whichever class came, through the acceptance of
its ideal, to control the heart and mind of society
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 655
could, without itself taking over the State, indir-
ectly control government policy, the content of
legislation, and the methods of the adminis-
trators’’ (Perkin, 1969, p. 273). The landed class
continued to dominate Parliament until the late
nineteenth century and ‘‘e?ectively controlled
recruitment to the Civil Service until at least 1870
00
(Perkin, 1969, p. 272).
Yet neither contemporaries nor historians
have doubted that the capitalist middle class
were the ‘‘real’’ rulers of mid-Victorian Eng-
land, in the sense that the laws which were
passed and executed by landed Parliaments
and Governments were increasingly those
demanded by the business men and—which is
not necessarily the same people—their intel-
lectual mentors. (Perkin, 1969, p. 272).
‘‘The triumph of entrepreneurial ideal’’ was com-
plete by the late nineteenth century (Perkin, 1969,
chap. 8) but, in 1829, the battle remained to be won.
The episode examined in this paper occurred in
the period of transition between the old society
and the new; a period when their respective ideol-
ogies were competing for ascendancy. We have
therefore examined events at a time in account-
ing’s history when a growing respect for business
practices was su?cient to convince the govern-
ment of the need to adopt the mercantile method
of accounting, but there remained e?ective and
successful resistance at the operational level to any
change in the nature on the purpose of such
accountability. The result was the introduction of
a new form of accounting that may have provided
a more accurate and complete record of central
government ?nances, but the principal focus on
personal accountability, rather than performance
assessment, stayed in place and the control of
government accounting by civil servants rather
than ‘‘men of account’’ remained secure. The out-
comes of this dispute stretch down to the present
day with the British government only very recently
deciding to radically revise government account-
ing by introducing so-called ‘‘resource accounting’’
and adopting private sector, accruals-based,
accounting practices for record keeping and
?nancial reporting purposes.
Acknowledgements
We gratefully acknowledge contributions from
participants in a seminar held at Deakin Uni-
versity, Burwood Campus, Melbourne, January
1998, from those attending the presentation of this
paper at the 21st Annual congress of the European
Accounting Association, Antwerp, Belgium, 6–8
April 1998, and from Brad Potter. We are parti-
cularly appreciative of the insightful criticisms,
comments and suggestions made by the two
anonymous referees and the encouragement pro-
vided by the editor of Accounting, Organizations
and Society. Any errors that remain are of course
our own. The research was ?nanced by the Scot-
tish Committee on Accounting History of the
Institute of Chartered Accountants of Scotland.
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658 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
doc_629739302.pdf
The study examines the contest between rival interests following the Treasury’s decision to explore the potential of
‘‘the mercantile system of double entry’’ bookkeeping as the basis for recording and reporting the financial affairs of
British central government. At the heart of the ensuing dispute was an ideological conflict between individuals representing
the competing interests of the aristocracy and those of the new capitalist classes.
British central government and ‘‘the mercantile system of
double entry’’ bookkeeping: a study of ideological con?ict
John Richard Edwards
a,
*, Hugh M. Coombs
b
, Hugh T. Greener
c
a
A
˜
ccounting Section, Cardi? Business School, Aberconway Building, Colum Drive, Cardi?, Wales CF10 3EU, UK
b
Division of Accounting and Finance, Business School, University of Glamorgan, Pontypridd CF37 1DL, UK
c
Finance Department, Cardi? University, Cardi? CF10 3XR, UK
Abstract
The study examines the contest between rival interests following the Treasury’s decision to explore the potential of
‘‘the mercantile system of double entry’’ bookkeeping as the basis for recording and reporting the ?nancial a?airs of
British central government. At the heart of the ensuing dispute was an ideological con?ict between individuals repre-
senting the competing interests of the aristocracy and those of the new capitalist classes. The battleground was whether
the mercantile system of double entry should be designed to re?ect the ‘‘old society’’ priorities of stewardship,
patronage and personal accountability or ‘‘new society’’ pressure for a business framework judged capable of achieving
‘‘cheap and e?cient government’’. # 2002 Elsevier Science Ltd. All rights reserved.
1. Introduction
Accounting historians, particularly the tradi-
tional, have been criticised for tracing account-
ing’s history as one of continuous evolution,
technical elaboration and improvement towards
its present state. This method of studying
accounting’s past was critiqued, in 1987, by a
leading architect of ‘‘The new accounting his-
tory’’,
1
Anthony Hopwood. His essay, entitled
‘‘The archaeology of accounting systems’’, argued
that most prior studies of the history of account-
ing had ‘‘adopted a rather technical perspective
delineating the residues of the accounting past
rather than more actively probing into the under-
lying processes and forces at work’’ (Hopwood,
1987, p. 207). This critical theme was taken up by,
amongst others, Miller and Napier (1993) who
made the case for genealogies of calculation rather
than traditional accounting history, with the term
genealogy conveying the need to investigate the
outcomes of the past rather than to pursue a
meaningless quest for the origins of the present.
This paper examines an interesting and impor-
tant episode in accounting’s history that saw an
attempt to introduce a supposedly superior system
of accounting to record and report the ?nancial
a?airs of Britain’s central government. The initia-
tive was resisted and we draw on concepts of
ideological con?ict and interest representation to
help comprehend the reasons for this dichotomy
and how it was resolved. Achievement of a better
accounting was seen to involve the adoption of
double instead of single entry bookkeeping and
accruals in place of cash based record keeping and
?nancial reporting. We will see that outcomes
0361-3682/02/$ - see front matter # 2002 Elsevier Science Ltd. All rights reserved.
PI I : S0361- 3682( 01) 00060- 5
Accounting, Organizations and Society 27 (2002) 637–658
www.elsevier.com/locate/aos
* Corresponding author. Tel.: +44-29-2087-6658.
E-mail address: edwardsjr@Cardi?.ac.uk (J.R. Edwards).
1
The title of the introductory article to a special issue of
Accounting, Organizations and Society, 1991, 5/6 (Miller, Hop-
per, & Laughlin, 1991).
from this dispute, which have had implications for
government sector accounting up to the present
day, included the rejection of accruals accounting
and, although double entry bookkeeping was
apparently introduced, evidence of the extent of its
adoption, whether in substance or in form, awaits
the location and study of relevant archival
records.
The plan to introduce double entry book-
keeping, to each department of State, in 1828,
inspired a ‘‘hostile’’ encounter between the three
Treasury Commissioners called in to formulate the
new system. These three Commissioners—‘‘the
leading public accountant of the day’’ (Peter Har-
riss
2
Abbott) and two senior civil servants (Tho-
mas Constantinus Brooksbank and Samuel
Beltz)—each accepted the need to apply ‘‘the
mercantile system of double entry in keeping the
public accounts’’ (BPP 1829, vi(b), Appendix No.
1). The battleground became the particular version
of double entry bookkeeping to be imposed. We
will see that Brooksbank and Beltz endorsed a
strictly stewardship-oriented form of double entry
designed to maintain consistency with the tradi-
tional objectives of the method of accounting—
charge and discharge
3
—then still widely used to
account for the ?nancial a?airs of British central
government. Abbott was equally determined to
transpose, without modi?cation, the system of
double entry employed by business,
4
thereby
implying the need to induce a business-like manner
into the management of British central govern-
ment’s ?nancial a?airs.
Contextualisation of this paper in time and
place is presented in the next two sections which
reveal (1) the rising criticism of central govern-
ment expenditure in the 1820s and related con-
cerns with the adequacy of prevailing government
accounting practice, and (2) the con?ict of ideolo-
gies that emerged between the new capitalist class
and the aristocracy as played out in pressure for
‘‘cheap and e?cient government’’ based on con-
temporary political economic theory. In Section 4,
we explore the backgrounds and prior experiences
of the participants in this con?ict. The key con-
tents of the separate and con?icting reports made
to the Lords of the Treasury (one by Abbott and
the other by Brooksbank and Beltz) are detailed
and analysed in Section 5. Next, we explain their
divergent views in terms of ideology and interest
representation and, in the penultimate section, put
forward explanations for the choice made by the
Lords of the Treasury. The paper concludes with a
discussion of Peter Harriss Abbott’s failure to
persuade the Lords of the Treasury to adopt his
business-oriented version of double entry book-
keeping.
2. Government ?nancial accountability and control
The lack of adequate accountability on the part
of British government was the subject of recurring
criticism (Roseveare, 1969) that gained momen-
tum in the years following the end of the Napo-
leonic wars in 1815. The national debt had
4
Double entry bookkeeping was variously referred to, up to
and around this time, as the Italian system, the Venetian sys-
tem, the commercial system, merchants’ accompts, and the
mercantile system. The source of the latter label is quite prob-
ably its increasing use to record the transactions of the rapidly
developing trading or mercantile enterprises dating from the
late-middle ages. The description may well have been coined
during the mercantilist period when, from the sixteenth to the
eighteenth century, major trading nations pursued economic
policies based on the premise that national wealth and power
were best served by close regulations designed to maximise the
balance of trade and stock of precious metals. The term sur-
vived into the antithetical period of laissez faire economics of
Adam Smith and the aspirant middle classes of the early nine-
teenth century, but was gradually replaced, along with the
other labels, by references to double entry bookkeeping.
2
Sometimes alternatively spelt Harris or Hariss in doc-
umentary sources.
3
Charge and discharge is a system of agency accounting
associated particularly, though by no means exclusively, with
manorial and governmental a?airs, through which the steward
or accounting o?cer discharged his ?nancial responsibility to
the higher authority (the lord of the manor or the government).
The agent was charged with sums of money (sometimes also
goods) for which he (sometimes she) was responsible (for
example, resources transferred by the principal to the agent or
collected by the agent on behalf of the principal), discharged
for legitimate payments and required to account for any bal-
ance outstanding. Charge and discharge made no distinction
between capital and revenue and was often, simply, a cash
account.
638 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
increased dramatically from £242.9 million at the
outbreak of hostilities in 1793 to £744.9 million in
the year that Napoleon Bonaparte was defeated at
Waterloo (Mitchell, 1988, p. 601). In the immedi-
ate post-war years, there emerged a strong body of
opinion in favour of bringing government expen-
diture under tight control, reducing the tax burden
and cutting down on government borrowing. John
Charles Herries served as ?nancial adviser to
Prime Minister, Lord Liverpool, during this
period, and it proved to be a frustrating stage of
his career. In a letter to the Chancellor of the
Exchequer, Rosenhagen, dated 13 February 1816,
Herries expressed exasperation that a ‘‘good, wise,
and economical Budget has crumbled in our
grasp, [because] the higher powers have yielded to
the subordinate departments’’ (quoted in Herries,
1880, vol. 1, p. 115). Two months later he urged
the Assistant Secretary to the Treasury to ‘‘take
some steps through the Secretary of State to check
the profuse and lavish expense which is now going
forward there’’ (quoted in Herries, 1880, vol. 1, p.
115). Stubborn resistance from the spending
departments, led by Lord Palmerston at the War
O?ce, produced a total failure of the ‘‘Tory
Government to satisfy the reasonable demand of
the nation for an immediate and su?cient relief
from the immense burdens laid upon the people,
and submitted to, for the prosecution of a just,
necessary and glorious war’’ (Herries, 1880, vol. 1,
p. 116). The result was that government debt
remained undiminished. Indeed, it had risen to
£844.3 million by 1819; a ?gure not exceeded until
the First World War (Mitchell, 1988, pp. 601–
602).
Growing condemnation of government expen-
diture levels and the lack of ?nancial control
(Hansard, 2nd series, vol. 4, 1821, col. 307; vol. 6,
1822, cols. 1114, 1462–3) led to the appointment
of a Select Committee on Public Accounts (BPP
1822, iv, p. 3) to consider ‘‘the best mode of sim-
plifying the accounts annually laid before the
Houses of Lords and Commons, in pursuance of
several Acts of Parliament, respecting the public
income and expenditure’’. In The History of the
Public Revenue of the British Empire, 1790, Sir
John Sinclair observed that, since the reign of
Queen Anne (1701–1714). ‘‘[n]o complete ftate-
ment has been made up, either of the total income
and expenditure of one reign, or even of any one
year’’ (Sinclair, 1790, part III, p. 53). This state of
a?airs persisted until 1822 when the publication of
‘‘an annual balance-sheet of the public receipt and
expenditure’’ was recommended in the Select
Committee’s report (BPP 1868–1869, xxxv,
Appendix No. 13, p. 326). ‘‘The ?rst balance-sheet
of the public income and expenditure of the Uni-
ted Kingdom’’ is for the year ending 5 January
1823 and can be found in the annual ?nance
account of that year (BPP 1868–1869, xxxv,
Appendix No. 13, p. 326). The term ‘‘balance-
sheet’’, as used there, however, does not signify the
availability of a ?nancial position statement in the
modern sense. For business accounting purposes,
the term ‘‘balance sheet’’ had achieved its present
day signi?cance long before 1822 of course but,
within government circles, the label continued to
describe a cash statement despite use of the terms
‘‘income’’ and ‘‘expenditure’’.
5
The politician and for 30 years the leader of the
radical party in Parliament (DNB, 1917, vol. 10, p.
230), Joseph Hume, played an important part in
drawing attention to the unsatisfactory state of the
public accounts.
6
According to Roseveare (1969,
p. 145):
year in, year out, sparing neither Whig nor
Tory governments, Hume challenged the esti-
mates in minute detail. Served by a small
group of expert clerks, Hume was a one-man
select committee on estimates, capable of
producing extremely detailed, carefully
worked-out schemes for ?nancial reform. In
1821 he was the pressure which forced on the
5
This cash statement was of course a ‘‘balance sheet’’ in the
sense that, assuming a cash surplus, the left hand side of this
?nancial statement, when presented in bilateral format,
revealed the opening balance and cash received while the right
hand side listed payments and the closing balance. Such a
statement, as noted above, was the usual product of the system
of charge and discharge accounting, and is also the output from
a system of double entry bookkeeping that is con?ned to a
record of cash transactions.
6
Hume was in?uenced by the philosophy of Jeremy Ben-
tham, also a serious critic of contemporary accounting practice
(Gallhofer & Haslam, 1994a, 1994b; Goldberg, 1957; Hume,
1970).
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 639
Treasury the severe salary cuts of August,
and in 1822 he helped expose the absurdities
of o?cial accounting.
7
Hume’s concern was to expose ‘‘every kind of
extravagance and abuse’’, and his biographer in
the DNB concludes that ‘‘it was chie?y through
his e?orts that ‘retrenchment’ was added to the
words ‘peace and reform’ as the [Tory] party
watchword’’. In pursuing this ideal, Hume is
thought to have spoken ‘‘longer and oftener and
probably worse than any other private member’’
(DNB, 1917, vol. 10, p. 231). When the accounting
practices within government departments were
again under scrutiny, later in that decade, Hansard
(2nd series, vol. 18, 1828, col. 443) reported as
follows: ‘‘another subject of importance,’’ declared
Hume, ‘‘which the right hon. gentleman’’, Robert
Peel,
alluded to, was one which deserved the best
consideration of a separate committee: he
meant the mode on which the public accounts
were kept in the Exchequers of England,
Scotland and Ireland. It would scarcely be
believed, that in the year 1828, the public
accounts in England, the land of accounts
and calculations, were kept in a manner simi-
lar to that of the savages of the Sandwich
Islands. They all recollected the manner in
which Robinson Crusoe kept his account of
the passing days, by cutting notches on a
piece of wood. Would it be believed that, in
the Exchequer of England, at the present day,
the same mode of notching a piece of wood,
called a tally, was observed, to mark a receipt
of money?
The Chancellor of the Exchequer (Rt. Hon.
Henry Goulburn), in time honoured fashion,
chose to focus on the form rather than the sub-
stance of the discussion: ‘‘the Hon. member has
greatly exaggerated the defects of the system,
when he had alluded to the marking of a stick
in the Exchequer. That practice was a relic of
barbarism, and has long been discontinued.’’
(Hansard, 2nd series. vol. 18, 1828, col. 446).
8
Certain members of the government were
nevertheless committed to the achievement of
more e?ective control of government expenditure.
Herries was brought into Parliament in 1823, as
member for the borough of Harwich, to join Lord
Liverpool’s government as Financial Secretary of
the Treasury (Herries, 1880, vol. 1, p. 119).
9
His
recommendations for retrenchment in order to
free funds for the reduction of the accumulated debt
are set out in a memorandum endorsed ‘‘Finance,
1827’’ which also pressed for the appointment of a
committee ‘‘to enquire into and report upon the
whole of our public expenditure’’ (Herries, 1880,
vol. 1, p. 144). It was therefore a combination of
radical pressure for retrenchment, and support for
such action from people within government keen
to combat pressure to maintain existing levels of
military expenditure,
10
that caused the Duke of
Wellington’s Tory government, that took o?ce in
1828, to appoint a parliamentary Finance Com-
mittee with Sir Henry Parnell as its chairman.
Parnell, ‘‘A disciple of Bentham and Ricardo
and zealous advocate of ?nancial reform’’ (Bartle,
1959, p. 113), castigated the existing public
accounting arrangements in On Financial Reform,
published in 1830. Through a resolution of these
problems, he believed, ‘‘a great retrenchment
might be made in all the o?cial establishments’’
and that the ‘‘public money would be [brought]
under a more secure custody’’ (Parnell, 1830, pp.
110–111). It was in pursuit of these ideals that
Parnell persuaded the Finance Committee to set
up a commission of experts whose duty it was to
7
Hume and David Ricardo were members of the 1822
Select Committee on Public Accounts.
8
The exact date of their complete discontinuance in use is
not entirely clear, but may have been a little later than the date
of this oral exchange (Baxter, 1989, pp. 81–82; Parker, 1984, p.
80; Robert, 1956, p. 85).
9
Herries served brie?y as Chancellor of the Exchequer in
1827, Master of the Mint, 1828–30, President of the Board of
Trade, 1830 and 1852, and Secretary at War, 1834–1835 (DNB,
1917, vol. 9, pp. 706–709).
10
In 1827, public expenditure totalled £56.1 million, of
which £29.2 million (52%) comprised interest and management
of the public debt, £16.7 million (30%) represented military
expenditure, and £10.2 million (18%) was accounted for by
civil and miscellaneous expenditure (BPP 1868–1869, xxxv,
Appendix No. 13, p. 149).
640 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
examine the wasteful system of public accounts
and to recommend improvements (Bartle, 1959, p.
113). Parnell and Herries, then Master of the Mint
and responsible for the sta?ng the committee,
nominated John Bowring
11
as one of the Com-
missioners, but this initiative was quashed when
the Duke of Wellington informed Herries that he
would ‘‘never consent to the appointment of such
a damned radical’’ (quoted in Bartle, 1959, p.
115). Peter Harriss Abbott’s substitute nomination
proved acceptable to the Lords of the Treasury
(Duke of Wellington, Henry Goulburn, and
Edward Granville Eliot, 3rd Earl of St. Germans),
and, on 29 April 1828, he was appointed, together
with Brooksbank and Beltz,
to enquire into and to state the manner in
which the public accounts are kept in the
several principal departments connected with
the receipt and expenditure of the money
granted by Parliament for the public service;
to ascertain the nature, description and pur-
pose of the several books used in each o?ce,
and to suggest such alterations as may appear
to be necessary, with a view of establishing a
more uniform system of keeping the public
accounts, as well as a?ording more satisfac-
tory and ready information as to the nature
and amount of the expenditure under each
head of service, and directing our particular
attention to the consideration as to how far it
may be practicable and advantageous to
employ the mercantile system of double entry
in keeping the public accounts. (BPP 1829,
vi(b), Appendix No. 1, emphasis added).
3. Ideological con?ict and the issue of ‘‘cheap
and e?cient government’’
Adam Smith (1776) is located by many as the
architect of laissez-faire economic theory, as sub-
sequently developed and moulded by classical
economists and Benthamites over the next cen-
tury. The theories formulated were designed ‘‘to
describe how an essentially uncontrolled economy,
in which the critical economic decisions are made
by individuals, each separately pursuing his own
interest, can nonetheless orderly and e?ciently do
society’s work’’ (Khan, 1970, p. 1). Such ideas
may be seen both as an attempt to theorise con-
temporary economic developments and as a means
of providing logic for the creation of a political
and economic climate within which such develop-
ments might ?ourish. Even those who remain
doubtful about the overall impact of such theories,
for example Lubenow (1971),
12
agree that eco-
nomic arguments were used in the nineteenth
century to press for cheap government and to help
create a strong and healthy economy. These
notions were embraced by politicians from both
sides of Parliament.
The political dimension is developed by Bellamy
(1990, p. 2) who de?nes contemporary philoso-
phies and certain state actions as an ‘‘attempt to
create a society of economically and politically
independent individuals whose qualities mirrored
their aspirations and interests’’. The liberal theor-
ists were therefore concerned to ‘‘come to terms
with the social, economic, and political implica-
tions of the emergent capitalist system’’. Further:
The aim of liberal politics consisted in allow-
ing the fullest range possible to these passions
in order to enable the maximum individual
liberty for the production and accumulation
of material wealth. Politics was subordinated
11
Bowring, a close friend and disciple of Jeremy Bentham
and someone who shared the concerns of Joseph Hume, advo-
cated the radical reform of government accounting (Parker,
1993). He subsequently found favour with the Whig govern-
ment returned in 1830, being appointed Secretary to the 1831
Commission on Public Accounts.
12
Lubenow (1971, pp. 26–27) believes that State action
moved forward under the in?uence of two overlapping models:
an idealised version of British custom and tradition within a
social and legal context that emphasised the rights of the indi-
vidual and the potential of autonomous action at local level;
and ‘‘an exercise in incrementalist politics’’ which consisted of a
series of legislative actions producing modi?cations to an
existing administrative structure rather than the implementa-
tion of any blueprint for political change based on a compre-
hensive and exhaustive policy analysis. For a debate in the
accounting literature on laissez-faire vs. incrementalism, see
Jones and Aiken (1995, 1999) and Walker (1996, 1999). The
concept of incrementalism is given speci?c application in
Walker (1998).
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 641
to the naturally harmonious causal properties
of social relations, so that liberalism came to
form the philosophical counterpart to laissez-
faire economics. (Bellamy, 1990, p. 2).
E?ective control over government expenditure
was therefore seen to be an essential precondition
for the creation of an economic climate conducive
to market-based developments and, as shown in
the previous section, politicians such as Bowring,
Herries, Hume and Parnell vigorously advocated
the pursuit of this goal.
The emergence of new political and economic
philosophies was associated with radical change in
the structure of society. In Perkin’s estimation
(1969, p. 176), the ‘‘most profound and far-reach-
ing consequence of the Industrial Revolution
[1760–1830] was the birth of a new class society’’.
The emergence of this new society ‘‘based on the
horizontal solidarities of class in place of the old
vertical connections of dependency or patronage’’
inevitable found the new capitalist middle class in
con?ict with the landed class who saw its hege-
mony under serious threat (Perkin, 1969, p. x; see
also chap. 6). The ‘‘old society’’, according to
Perkin (1969, p. 38), ‘‘was ?rmly based on the twin
principles of property and patronage’’. One’s place
in society was measured by the amount and nature
of one’s property. Indeed, private as opposed to
government patronage would almost inevitably be
based on property. Property thus enabled the
established society to renew itself in successive
generations through the purchase of positions—
for example, the commission of lieutenant-colonel
in the army could be acquired for £3500 in 1765
(Perkin, 1969, p. 44)—and through appointments
within its gift.
Existing alongside, and dovetailing with perso-
nal patronage, was political patronage so that ‘‘At
all levels, patronage, the system of personal selec-
tion from amongst one’s kinsmen and connec-
tions, was the instrument by which property
in?uenced recruitment to those positions in society
which were not determined by property alone’’
(Perkin, 1969, p. 45). A person’s position within
this society depended upon how many ‘‘friends’’
(s)he could ‘‘oblige’’ or be obliged by. Nineteenth-
century parliamentary reform is therefore seen by
Perkin as comprising ‘‘A struggle between the
class ideals, as an attack on property and patron-
age by capital and competition (supported by
expertise and selection by merit) from the one side
and by labour and co-operation from the other.’’
(Perkin, 1969, p. 310).
The emergence of a class society witnessed, dur-
ing the nineteenth century, the ‘‘Battle for the
State’’ and, eventually, ‘‘The triumph of the
entrepreneurial ideal’’, with a key feature of this
con?ict being ‘‘The battle for administrative
reform, to determine the machinery of executive
government and the method of recruiting the
administrators’’ (Perkin, 1969, pp. 308–309). The
reform of government, in common with the
reconstruction of British society, becomes appar-
ent, with hindsight, as the industrial revolution
gained momentum. According to Roseveare
(1969, p. 118), ‘‘The winter of 1779–80 saw the
beginning of a movement which was to produce
much more than an administrative revolution. It
was to introduce into public life a new morality
and to ?nance a new probity and into government
as a whole new standards of e?ciency and econ-
omy’’. The beginning of change was heralded with
the appointment, on 2 March 1780, of a commis-
sion of enquiry into public accounts, which pro-
duced fourteen reports over a period of seven
years (Roseveare, 1969, p. 120). These reports are
thought to have encouraged, in due course,
important changes in government recruitment,
organisation and administration (Cohen, 1941,
chap. 2; Roseveare, 1969, chap. 5).
In the move towards ‘‘The professionalization
of government’’ (Perkin, 1969, p. 319), Perkin sees
progress achieved by implementing the ‘‘indis-
tinguishable’’ ideals of the Benthamites and the
classical economists.
In the battles for morality, for public opinion,
and for political control of the State, the
professional ideal of a functional society
based on expertise and selection by merit was
almost interchangeable with the entrepre-
neurial ideal of a class society based on capi-
tal and competition. . .. The cheap and e?cient
government demanded by the entrepreneurial
ideal could only be provided by expert
642 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
professional administrators selected by merit.
As allies they conquered, achieving in the
creation of the modern bureaucratic adminis-
trative machine and the new civil service
quali?ed and ?nally selected by examination
a clearer-cut victory than in Parliamentary
Reform. (Perkin, 1969, p. 320, emphasis
added).
The wide range of reforms favoured by the pro-
fessional and entrepreneurial classes—whose ideals
remained closely aligned throughout the period
covered by this paper
13
—included ‘‘the abolition
of patronage and ‘corruption’, of amateurism and
ine?ciency, extravagance and waste, secrecy and
lack of accountability, and their replacement by
selection and promotion by merit, by professional
e?ciency, retrenchment and economy, publicity
and full ?nancial accountability’’ (Perkin, 1969, p.
320). To achieve the professional and entrepre-
neurial ideals, positive aspects were stressed:
‘‘selection of talent and expertise, e?ciency and
economy interpreted as the e?ective solution of
social problems and the abolition of waste arising
from social and administrative neglect’’ (Perkin,
1969, p. 321).
The movement for the adoption of ‘‘the mer-
cantile system of double entry’’, as the means of
improving government accountability by placing
its accounting system on a commercial basis, was a
signi?cant event in the quest for ‘‘cheap and e?-
cient government’’. We will see, however, that
established ideas concerning the role of account-
ability within a hierarchical society remained
in?uential in determining the design and funda-
mental content of the system of double entry
bookkeeping to be put in place.
4. De?ning Commissioners in con?ict
In 1828, as noted above, the Treasury appointed
three Commissioners to consider ‘‘how far it may
be practicable and advantageous to employ the
mercantile system of double entry in keeping the
public accounts’’. An examination of the back-
grounds of these Commissioners is an essential
pre-condition for our understanding of the serious
disagreement that ensued, between them, con-
cerning the version of double entry bookkeeping
to be recommended for adoption by Britain’s
central government.
Peter Harriss Abbott was born on the island of
St. Christopher in the West Indies in either 1774
or 1775 and, by the age of 28, was trading as a
merchant based in the City of London (Kent’s
Directory, 1812). Twelve years later, he is listed in
the Post O?ce London Directory as a commercial
agent and accountant working from 14 Walbrook.
In Bywater’s estimation (1985, p. 791), Abbott
was ‘‘the leading public accountant of the day’’.
Obituaries written to commemorate the death of
his famous former clerk, William Quilter (Bywa-
ter, 1985), probably formed the basis for this later
assessment. The eulogy printed in The Accountant
described Abbott as the ‘‘practical founder of the
profession of public accountants in this country’’
(17 November 1888, p. 754) while The Times, in
what was probably an over-critical assessment of
the state of public accounting 60 years earlier,
judged him to be ‘‘the only accountant of any
note’’ (obituary reproduced in The Accountant, 24
November 1888, p. 769).
Abbott had moved to Kings Arms Yard,
Moorgate, by the time he prepared his report for
the Lords of the Treasury and is listed as practis-
ing there in Robson’s London Directory for 1830.
Following Abbott’s appointment by Lord Chan-
cellor, Brougham, to the position of O?cial
Assignee to the Court of Bankruptcy, in 1831, two
of his former clerks, William Quilter and John
Ball, took over a practice subsequently described
as the ‘‘most extensive in England’’ (BPP, 1849, x,
minute 2,215; Bywater, 1985, p. 794). Central
government’s continued high regard for Abbott’s
expertise, as a public accountant, is revealed
through a series of subsequent engagements. Ser-
vices supplied to the Excise Department, for
example, involved ‘‘throwing’’ the accounts ‘‘into
double entry’’ and ridding it of ‘‘at least 700
volumes of books’’. Reforms which, in Abbott’s
estimation, yielded savings of ‘‘300,000l. a year in
the administration of the department’’ (BPP 1837,
13
The growing domination of the professional ideal from
about 1880 onwards is examined in Perkin (1989).
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 643
vii, minutes 1,311–13).
14
Abbott appears to have
continued to remain heavily involved in trading
activities, while practising as a public accountant,
which was perfectly legitimate, but also after tak-
ing on the public o?ce of O?cial Assignee, which
was not (Edwards, 2001, pp. 684–5).
An insight to Abbott’s economic and political
philosophies is contained in a pamphlet published
in 1839 entitled On the Public Debt. This is a
scathing attack on the governments of Great Brit-
ain, commencing with an expression of doubt
whether ‘‘Mr. Pitt could have extracted the large
sums he did from the pockets of the people [during
the Napoleonic Wars], had he not held out the
promise and prospect of repayment’’ (Abbott,
1839, p. 3). The interest on public debt accounted
for ‘‘three-?fths of the aggregate annual expendi-
ture’’ and, in Abbott’s judgement, the ‘‘onerous
taxation’’ required to service the public debt was
‘‘cramping, perhaps destroying altogether, the
energies of the farmer, manufacturer, and mer-
chant’’ (Abbott, 1839, p. 8). Even more serious
was seen to be the risk that ‘‘the master manu-
facturers’’ might be ‘‘ready to embark with their
men and machinery for other countries where
their honest industry, uncrippled by domestic
taxation, may have a fairer chance of success’’
(Abbott, 1839, pp. 30–31). Although perceived by
Wellington as less radical than Bowring, the
Treasury had clearly appointed someone who
proved to be a strident critic of government
expenditure levels. Indeed, Abbott may be located
as a middle class, evangelical businessman who
epitomised the ‘‘entrepreneurial ideal’’; a member
of what Brougham described to the House of
Lords in 1831
15
as ‘‘the middle classes, the wealth
and intelligence of the country, the glory of the
British name’’ (quoted in Perkin, 1969, p. 230).
Thomas Constantinus Brooksbank has been
identi?ed by Gray as someone who, following the
Treasury reforms of 1805, was able to take
advantage of the ‘‘ample scope [provided] for a
young man with energy and ability to carve out a
career for himself in the department’’ (Gray, 1963,
p. 314). The available evidence suggests that he
was descended from Stamp Brooksbank (b. 1694)
of Healaugh Manor, Yorkshire, who served as
MP for Colchester and Saltash and as a governor
of the Bank of England. Stamp Brooksbank had a
‘‘numerous family’’ including a second son, also
named Stamp (b. 1726) (Burke’s Peerage, 1967, p.
348), who enjoyed a highly successful career in the
civil service. Norris (1963, p. 211) informs us that
Stamp Brooksbank was the bene?ciary of a
‘‘patronage appointment’’ but proved to be one of
Whig Prime Minister Shelburne’s staunch suppor-
ters when endeavouring to reform the administra-
tion of the Revenue Departments.
16
Stamp
Brooksbank’s own son, Stamp (b. 1779), worked
with Thomas at the Treasury (Royal Kalendar). A
Treasury minute attributed to both Stamp and
Thomas Brooksbank an ‘‘intimate knowledge of
the duties of this [Treasury] department’’ based
on ‘‘their talents and long experience in public
business’’ (BPP 1843, xxx, pp. 585). In 1831, they
were each invited to submit ‘‘opinions’’ on the
appropriate quali?cations for clerks entering the
Treasury O?ce.
Thomas initially entered the Treasury in 1796 as
‘‘an extra clerk in the revenue department’’ (Gray,
1963, p. 314), and rose to become Principal Clerk
and Private Secretary to Spencer Perceval and
then to Lord Liverpool when those subsequent
prime ministers were at the Exchequer. He is listed
in the Royal Kalendar for 1805 amongst ‘‘other
clerks’’ in the Revenue Department of the Treas-
ury O?ce, subsequently being promoted to Assis-
tant Clerk and then holding the post of Senior
Clerk from 1811 to 1829. Following completion of
his work as a Treasury Commissioner, Brooks-
bank became Chief Clerk in the Revenue Depart-
ment; a position which, post-1805, carried no
responsibility for the general supervision of o?ce
business, leaving occupants ‘‘free to concentrate
16
Shelburne was determined to introduce ‘‘administrative
e?ciency’’ into the ‘‘national ?nancial system’’, receiving sup-
port from a small number of in?uential civil servants, including
Brooksbank, who ‘‘had taken a pessimistic view of the system
and its operation’’ (Norris, 1963, p. 202; see also p. 233).
14
Abbott was also called in to investigate a fraud at the
Greenwich Hospital (see below), engaged to introduce double
entry into a number of government departments and called to give
evidence before the Select Committee on the Accounts of Colonial
Receipt and Expenditure, 1837 (Edwards, 2001, pp. 679–81).
15
The year that Brougham appointed Abbott to the position
of O?cial Assignee.
644 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
on the work of their own departments’’ (Gray,
1963, p. 313).
At the same time as holding these principal
employments, Thomas Brooksbank bene?ted sig-
ni?cantly from access to additional engagements,
possibly involving little or no work, which
remained endemic to the contemporary political
scene. We know that, around the time of his
appointment as Commissioner, Brooksbank acted
as the Accounting Agent for the Bahamas (BPP
1831, x, p. 141) and as Agent and Paymaster of the
Out-pensioners at the Royal Hospital, Chelsea
(Royal Kalendar, 1830). The positions ?lled by
Brooksbank changed over time and one might
imagine that their ?nancial rewards generally got
better rather than worse. There are some ?gures
available for about a decade earlier which show
that, through additional appointments, he was
almost able to double the remuneration from his
main employment; in 1821/1822, he received
£1000 as Senior Clerk, £750 as Agent for Out-
pensioners at the Royal Hospital, Chelsea, and
£200 as a General Commissioner for the Lottery
O?ce (BPP 1822, xvii, Appendix Nos. 2, 8 and
15).
17
An insight to the social background that
placed Brooksbank in a position where he was
able to bene?t from such preferment is implicit in
his assessment of the educational standards
appropriate for Treasury sta?: ‘‘I at once unhesi-
tatingly give my opinion that the general Educa-
tion of a Gentleman is the best suited for all
purposes’’ (quoted in Roseveare, 1969, p. 163).
18
He lived latterly in fashionable Cadogan Place, o?
Sloane Street, Chelsea.
19
Little is known about Samuel Beltz who, given
the ordering of signatures to the joint reports,
appears to have been the junior member of the
partnership. He is described in the Royal Kalendar
as Senior Clerk in the foreign branch of the Com-
missariat Department of the Treasury before
being promoted to Chief Clerk in the Civil Service
Pay O?ce, by 1826, serving in that capacity
through to 1848.
20
We can thus see that Abbott had an entirely
di?erent career, and probably family, background,
from Brooksbank and Beltz at the time the three
were engaged to investigate the accounting proce-
dures appropriate for central government. Abbott
was a ‘‘commercial agent and accountant’’ who
possessed a close and continuing connection with
those engaged in trade and commerce. Brooks-
bank and Beltz, by way of contrast, were career
civil servants holding appointments that ensured
they were fully acquainted with government
accounting methods. The variety in their career
paths is suggestive of them belonging to quite dif-
ferent layers of early nineteenth century society. It
is known that many early practising accountants
developed their accounting skills working in busi-
ness (Matthews, Anderson, & Edwards, 1998, pp.
18–20) and Abbott certainly had a background
‘‘in trade’’. We also know that, within the civil
service, appointments relied heavily on patronage
until reforms inspired by the Trevelyan-Northcote
Report on the Organization of the Permanent Civil
Service, 1854, led to ‘‘the establishment of a
proper system of examination by a central board’’
(DNB, 1917, vol. 14, p. 640). The biographical
evidence presented above shows that Brooksbank
was born into a society where family connections
were an important factor in securing gainful
17
To provide some perspective for these ?gures, they may be
compared with Colquhoun’s 1803 estimates of the average
annual income of the aristocracy, £1206, middle ranks, £195
and lower orders, £39 (reproduced in Perkin, 1969, pp. 20–21).
18
The precise attributes speci?ed for an eighteen year-old-
candidate, by Brooksbank, were: ‘‘1. A su?cient knowledge of
Classical Literature to pass an Examination for matriculation
at Oxford—or for entrance to the Inner Temple. 2. Arith-
metic—including Vulgar and Decimal Fractions. 3. The 5 or 6
?rst Books of Euclid. 4. Algebra—inclusive of Quadratic
Equations.’’
19
Census records for 1841 (Family Records Centre) reveal
that he lived with his wife, daughter, two sons, Charles and
Theodore, who were respectively a clergyman and a barrister,
and three servants. Boyle’s Court Guide for April 1840 lists
amongst Brooksbank’s neighbours, as heads of their house-
hold, three titled ladies, nine military o?cers (two with knight-
hoods), one knight, three ministers, two barristers and two
surgeons.
20
It seems that the Pay O?ce was then combined with the
Paymaster General’s O?ce since most of the former depart-
ment’s sta?, other than the Chief Clerk and the Paymaster in
charge of the Civil Service Pay O?ce, were transferred to the
latter location. Beltz was at this time about 65 years of age and
might well have then retired since there is no further trace of
him in the Royal Kalendar.
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 645
employment, and we might expect that the same
was true of Beltz. Irrespective of whether our
conclusions about family backgrounds are entirely
correct, however, we know that by the time of
their appointments as Commissioners, one was
associated with the resurgent middle classes and
the others with the landed classes.
We are therefore able to infer, from our knowl-
edge of their divergent backgrounds and career
experiences, that the Commissioners would have
viewed the nature and purpose of government
accounting from contrasting ideological stand-
points, and we will show that this was indeed the
case. Such diversity had signi?cant implications
for the Commissioners’ assessment of the infor-
mation requirements of public o?cials, their view
of the way in which the bookkeeping system
should be designed to meet those needs, and the
Lords of the Treasury’s assessment of the utility of
the schemes put forward. More speci?cally,
Brooksbank and Beltz, as senior civil servants,
perceived themselves as responsible for defending
the traditional role of government accounting
against the radical changes advocated by the
champion of business methods and the entrepre-
neurial ideal.
5. Designing ‘‘the mercantile system of double
entry’’
It is generally accepted that double entry book-
keeping was developed out of prior record keeping
systems by banking and trading partnerships
operating in the Italian City States of Genoa,
Florence and Venice during the thirteenth and
fourteenth centuries (Lee, 1977). The impetus for
the subsequent di?usion and widespread adoption
of the Italian system has been the subject of study,
with relevant in?uences identi?ed as the level of
business activity, the size and complexity of orga-
nisational structures, the ready availability of
relevant literature, the socialization of capital, a
concern to maximise the rate of return on capital
employed, and the technique’s disciplinary poten-
tial (Bryer, 1993, 2000a, 2000b; Hoskin & Macve,
1986; Mills, 1994; Sombart, 1924; Yamey, 1949,
1964).
The Italian system was probably ?rst employed
in England by the London Branch of an Italian
?rm of merchants—the Gallerani company of
Sienna—between 1305 and 1308 (Nobes, 1994). It
was ?rst elucidated in printed form by Pacioli in
1494 and in Britain by Hugh Oldcastle in 1543
(Coomber, 1956). The adoption of the Italian sys-
tem was subsequently advocated through a bur-
geoning array of texts that appeared in Britain
post-1543 (Bolton, 1975, pp. 69–144), with wide-
ranging and sometimes excessive claims made by
their authors for the system’s contribution to the
e?cient conduct of business and domestic a?airs.
Double entry increasingly found favour amongst
trading and manufacturing companies during the
centuries that followed, and was embraced by
local government, particularly municipal corpora-
tions, during the nineteenth century. Double entry
was also adopted, early on, to help provide owners
of industrial companies with information relevant
for decision making (Edwards & Boyns, 1992).
Within the political and ideological context dis-
cussed above, the third decade of the nineteenth
century saw a ‘‘drift of ideas’’ (Clarke, 1982, p. 85)
from business to British central government con-
cerning the utility of double entry bookkeeping for
more e?ectively recording and reporting resource
?ows.
5.1. A modi?ed mercantile system of account
The Lords of the Treasury had expected to
receive a joint report from the Commissioners,
and the preparation of two reports—one by
Brooksbank and Beltz and the other by Abbott—
signalled fundamental disagreement concerning
the recommendations to be made. The report
signed only by Brooksbank and Beltz (B&B) was
submitted to the government on 9 February 1829.
The ‘‘Prefatory Remarks’’ set out, in the following
terms, what they judged to be the ‘‘General Prin-
ciples essential for the Public Accounts’’. These
articulated the need for the ‘‘System of the
Accounts’’ (BPP 1829, vi(a), p. 113) to ‘‘depend in
a great measure upon the nature, whether simple
or complex, of its pecuniary transactions’’ (BPP
1829, vi(a), p. 4). They also, signi?cantly in view of
the way the dispute was played out, attached par-
646 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
ticular weight to the need for the system, to allow
‘‘a facility of examination, and a ready means of
a?ording information on every transaction the
Accounts involve’’ (BPP 1829, vi(a), p. 4, empha-
sis in original).
B&B favoured the introduction of double entry
bookkeeping because the existing ‘‘plan’’ of public
accounts had proved de?cient due to the con-
siderable alteration in circumstances since its
implementation ‘‘in times remote from the pre-
sent’’ (BPP 1829, vi(a), p. 88). To make suitable
for government application, however, B&B con-
sidered the ‘‘mercantile system of double entry’’ to
require signi?cant amendment in terms of (1) the
structure and content of the books of account to
be used, and (2) the type of resource ?ows to be
measured. Looking ?rst at structure and content,
the principal books were to be a cash book, a bills
book, a journal
21
and a ledger kept on the princi-
ple of double entry ‘‘so as to furnish at all times
when required, either for the purpose of informa-
tion, or to prove the correctness of the accounts
and proceedings, a satisfactory [cash-based] BAL-
ANCE SHEET’’ (BPP 1829, vi(a), p. 89). Under
the mercantile system, according to B&B, all
transactions were
transcribed and technically arranged in the
Journal, and thence posted into the Ledger,
where nothing more is shown (besides the
dates, amounts and references to the Book
where the particulars are detailed) than the
titles of the accounts which form the coun-
terbalancing or double entries; and the
Account is still further involved in obscurity
by the frequent use of the word ‘‘Sundries’’,
as inclusive of two or more such titles (BPP
1829, vi(a), p. 89, emphasis added).
B&B did not consider a ledger designed along
these lines su?cient to meet the information require-
ments of public o?cials for the following reasons:
A Public O?ce, which is continually called
upon for information upon a variety of
subjects, should possess the readiest possible
means of furnishing that information; and to
this end, the ledger should be made to contain
a condensed, but more circumstantial detail
of the proceedings than is usually a?orded
under the mercantile system. (BPP 1829,
vi(a), p. 89).
The ‘‘more circumstantial detail’’ included the
date, the name of the party and the description of
the service. Additional advantages claimed for
their scheme were
that inaccuracies, and even frauds, may be
much more easily prevented or detected by
the use of the greater detail recommended,
than when nothing more is immediately pre-
sented to the eye than entries under such brief
descriptions as ‘‘Sundries,’’ or the mere titles
or headings of accounts. (BPP 1829, vi(a),
p. 89).
Such detail was judged to supply for the public
o?ce the same security as ‘‘the vigilance of the
principal’’ (BPP 1829, vi(a), p. 89) ensured in the
counting-house. It was further argued that this
modi?cation to the Italian system would not result
in an overall increase in work-load because post-
ings could be made directly from the cash book to
the ledger rather than being routed through the
journal as Abbott appeared to prefer. The way in
which the books recorded relationships between
accounting o?cers and the State, and how they
di?ered from those maintained by commercial
organisations, was described in the following
words.
The periodical accounts of the sub-accoun-
tants to a public department are mere money
accounts, containing on opposite sides a sim-
ple detail of the receipts and payments in the
order in which they occur. The account-book
usually termed a JOURNAL must, under the
proposed arrangement, be almost exclusively
appropriated for the entry of those accounts,
and therefore partake essentially of the nature
of the CASH BOOK, . . . It [the journal] is not
wanted in a public o?ce for adjusting the
21
The cash book, bills book and journal represent sub-
divisions of the all-inclusive journal advocated by Abbott.
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 647
various rami?cations of a PROFIT AND
LOSS account, the complicated a?airs of a
PARTNERSHIP, or the multifarious inci-
dents of a wide ?eld of COMMERCIAL
ADVENTURE. The o?cial Journal is a
book of very simple description, in fact, a
miscellaneous cash-account, capable of being
constructed with peculiar advantage, as is
now attempted, upon precisely the same
principle of arrangement as the Cash Book
and Ledger. (BPP 1829, vi(a), p. 119)
The application of double entry bookkeeping to
government ?nancial a?airs was also, as indicated
above, considered to require amendment to the
measurement procedures employed. B&B believed
that, with a single exception, the cash-based
method of accounting should be retained in pref-
erence to the accruals-based system employed by
business. Where a department undertook manu-
facturing activities (this comment seems to have
applied principally, and perhaps only, to the dock-
yards of the Navy Department), B&B accepted
that it was ‘‘indispensably necessary for the due
regulation of its proceedings that it should possess
the means of ascertaining as accurately as possible
the actual cost to the Public of the article pro-
duced, with a view to a comparison of such cost
with the price at which it might be obtained ready
fabricated from the contractor’’ (BPP 1829, vi(a),
p. 93). Thus they were willing to approve ‘‘a
regular Manufacturer’s Journal and Ledger’’ so
that ‘‘a perfectly accurate account of the expenses
attending the manufacturing processes, and a
tolerably accurate statement of the value of
the whole stock on hand are obtained’’ (BPP
1829, vi(a), pp. 94–95).
22
B&B even agreed
that ‘‘the rigid application of the mercantile sys-
tem of double-entry’’ to public accounting gen-
erally was achievable, but they considered such a
course to be entirely inappropriate (BPP 1829,
vi(a), p. 94).
5.2. A view from the business world
Peter Harriss Abbott entered the debate through
a separate report dated 28 February 1829. The
absence of co-operation between the Commis-
sioners followed B&B’s discovery that Abbott had
independently investigated criminal irregularities
at the Royal Greenwich Hospital, a quasi-govern-
mental institution (BPP 1830, xxix, 5).
23
Abbott
had introduced, at Greenwich, an accruals-based
system of double entry bookkeeping that incorpo-
rated a fully detailed journal and a summarised
ledger. B&B formulated a detailed critique of the
utility of this system for a public o?ce and of the
quali?cations of a ‘‘professional Accountant’’
(BPP 1829, vi(a), p. 101) to perform the task.
Their dismissal of the scheme introduced at
Greenwich Hospital as being ‘‘complex, incon-
sistent, confused and obscure’’ (BPP 1829, vi(a), p.
102) set the tone for a full and frank exchange of
views between the Commissioners. Abbott con-
curred with B&B’s assessment of the legitimacy of
double entry bookkeeping as the basis for keeping
the public accounts, but then went on to make the
case for ‘‘the universal adoption of the mercantile
system in the various departments of the Govern-
ment’’ (BPP 1829, vi(b), p. 21). Modi?cations to
the mercantile system of accounts such as ‘‘those
recommended by Messrs. Brooksbank and Beltz
(and which I make no doubt have repeatedly
occurred to and been as repeatedly rejected by
men of account)’’, argued Abbott, ‘‘must end, if
adopted, in disappointing every expectation of
bene?t to be derived from this commission’’ (BPP
1829, vi(b), p. 154). Particular attention was
devoted to justifying the adoption of the compre-
hensive journal, for which the following advan-
tages were claimed:
23
B&B complained that they had received ‘‘no intimation
whatever from Mr. Abbott, although at the time associated
with us in the task of enquiring into and suggesting improve-
ments in the mode of keeping the public accounts, or from the
directors [of Greenwich Hospital], of the intention of immedi-
ately introducing in this establishment a new system of book-
keeping, so as to enable us to submit our opinion upon the
subject, or to contribute our assistance during the process; and
on our visit to the hospital we found the reformed system
already in operation’’ (BPP 1829, vi(a), p. 101).
22
This system is referred to as ‘‘Store Accounts’’ (BPP 1829,
vi(a), p. 93) in contrast with the system of ‘‘Cash Accounts’’ on
which the principal books of the public departments were to be
framed (BPP 1829, vi(a), p. 89).
648 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
Where a Journal is employed, the motives,
at the instant of the inscription of each
transaction, are recorded. A Journal, in this
light, is most essential in a Public Depart-
ment, where the heads of o?ce are fre-
quently removed and replaced by other
individuals; but it has intrinsic properties in
a perfect system of account, that are dis-
regarded, only, where they are not inti-
mately known. (BPP 1829, vi(b), p. 4)
[A] journal enables the ledger-keeper to
correct errors that may creep in, or to make
alterations that may be needful in the
accounts, without having recourse to era-
sures or obliterations. (BPP 1829, vi(b), p. 4).
A journal is most useful at the annual bal-
ancing of the Ledger. . .[which]. . .must
include not only the money actually expen-
ded, but also the liabilities of the establish-
ment. (BPP 1829, vi(b), p. 5)
The ?rst two requirements were broadly satis-
?ed under the version of double entry favoured by
B&B; detail was available elsewhere (in either the
cash book or the ledger), and the use of a journal
to make amending entries was explicitly recog-
nised. But common ground was overlooked in a
dispute which degenerated into a determination to
acknowledge no merit whatsoever in the oppo-
nent’s system.
The last of Abbott’s three points draws atten-
tion to a signi?cant, and recurrent, problem in
public accounting, i.e. the often massive delays
that occurred in closing departmental accounts
with the result that departmental a?airs were often
audited and reported to Parliament many years
after the end of the period that they covered. With
government activity routinely transacted by public
o?cials personally handling the related cash ?ows,
there was a clear ?nancial incentive for them to
fall well behind with their accountability when in
possession of balances due to the Exchequer. Lord
Henry Petty, then Chancellor of the Exchequer,
informed the House of the following in 1806:
It will surprise the House and the public to
hear that there are accounts not passed to the
amount of £167,000,000—that there are
accounts not proceeded in the amount of
£58,000,000—that there are twenty-one years
pay-o?ce accounts to the amount of
£150,000,000 not delivered in—that there are
naval accounts in the same situation in the
amount of £80,000,000, and, to sum up the
whole, that the arrears make the enormous
sum of £455,000,000 of public money unac-
counted for, that is to say a larger sum unac-
counted for than composes the whole of the
national debt. (Quoted in Cohen, 1941, p. 48).
Abbott drew attention to the fact that adoption
of accruals accounting would enable the books to
be closed soon after the end of an accounting
period by making provision through the journal
for any outstanding liabilities.
24
Unde B&B’s
cash-based system, Abbott argued, the ‘‘annual
Balance’’ would continue to be ‘‘needlessly deferred’’
so that ‘‘all sums due, but not paid at the close of
the year, may, when paid, be introduced before the
books are balanced’’ (BPP 1829, vi(b), p. 151).
25
The areas of di?erence between the protagonists
are highlighted through the opportunity given
B&B to respond to each of the 24 paragraphs of
Abbott’s general report, with their observations
presented in columnar format amongst the printed
papers (BPP 1829, vi(b), pp. 143–155). Their
divergent attitudes concerning the measurement
basis to be adopted—cash or accruals—and the
degree of detail to be provided in the journal vis-a` -
vis the ledger are there clearly portrayed (BPP
1829, vi(b), pp. 146–147).
Abbott drew attention to the inconsistency
between B&B’s commitment to a ‘‘UNIFORM
SYSTEM OF ACCOUNT’’ (BPP 1829, vi(a), p.
88) and their acceptance of the need for ‘‘two sets
of books, on di?erent principles’’ within the same
24
‘‘These inconveniences are remedied by the use of the
mercantile journal, and by the adoption of an expedient known
to all practical book-keepers and embraced by the Italian sys-
tem.’’ (BPP 1829, vi(b), p. 151)
25
Cory (1840, pp. 170–1) informs us that, over a decade after
the dates of the Commissioners reports, the annual Army
accounts typically remained open for 8–10 years. The Admir-
alty is cited as the model to be emulated as it left open its
accounts for just six months beyond the 31 March accounting
date.
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 649
department; accruals accounting for the dock-
yards and cash accounting for the remainder of
the Navy Department (BPP 1829, vi(b), p. 144).
Given his claim to have successfully applied ‘‘the
mercantile system’’ to one public activity (Green-
wich Hospital), he trumpeted his system as ‘‘uni-
versally applicable’’ and that of B&B as ‘‘not so’’
(BPP 1829, vi(b), p. 144). B&B’s response was
that, in computing the cost of articles manu-
factured, in the ‘‘manufacturer’s ledger’’, it is pos-
sible to be ‘‘more concise’’ because ‘‘we have not
to guard against the risk of fraud, as in the more
important matter of the cash transactions’’ (BPP
1829, vi(b), p. 144). Given Abbott’s familiarity
with the a?airs of public departments, they con-
tinued, he must be ‘‘aware of the impracticability
of combining for any useful purpose the cash and
store transactions, so as to produce a regular
pro?t and loss account after the manner of mer-
chants; and yet it would seem that he must have
had such an arrangement in view’’ (BPP 1829,
vi(b), p. 144).
Abbott further argued the case for full detail in
the journal and summary headings only in the
ledger (as epitomised by use of the term ‘‘sun-
dries’’) on the grounds that ‘‘it is this condensation
in the journal that renders the mercantile ledger so
far more compendious than the o?cial ledger of
Messrs. Brooksbank and Beltz’’ (BPP 1829, vi(b),
p. 146). Use of the term ‘‘sundries’’ was required,
he believed, ‘‘unless great additional labour should
be considered a fair price for its rejection’’. B&B
considered the price worth paying with the term
‘‘sundries’’ rejected on the grounds that ‘‘it would
be more advantageous, on many grounds, to
[provide] detail in that book’’ (BPP 1829, vi(b), p.
147). Such grounds included a concern that,
otherwise, the ledger accounts could not be
understood ‘‘without constantly referring to the
journal’’ (BPP 1829, vi(b), p. 146).
The underlying signi?cance of the Commissioners’
contrasting views is explored in the next section.
6. Explaining contrasting bookkeeping designs
The essence of the disagreement between Abbott
and B&B came down to di?erent perceptions of
the core purpose of the government accounting
system. Re?ecting his business background,
Abbott saw ‘‘the mercantile system of accounts’’
providing the means of inducing a commercial
manner when managing the ?nancial a?airs of
British central government. He located the pur-
pose of accounting as being to ensure that indivi-
dual transactions ended up in the appropriate
account in the ledger, with the detail of how and
why the transaction a?ected that account unim-
portant. B&B, on the other hand, believed that
ledger accounts should also contain a visible
record of personal accountability.
6.1. Maintaining personal accountability
Bookkeeping treatises published from the six-
teenth century onwards (see, for example, Jack-
son, 1956) were written primarily for the business
community and oriented towards the role for
double entry advocated by Abbott. That is, the
principal emphasis was placed on which accounts
to credit and which to debit for particular trans-
actions. The so-called ownership theory (Jackson,
1956, pp. 306–312) saw accounts mainly as
mechanisms for recording the e?ect of transac-
tions on the balance of assets and liabilities, pro?t
and loss (p. 309). In such circumstances, the pro-
vision of detail in the ledger was unimportant. The
trend within the business world towards the pro-
vision of less detail in the ledger and a greater
emphasis on ?nancial reports to assess perfor-
mance by product, by department or of the
individual, was naturally seen, by some, as inap-
propriate for the government sector with its
emphasis on the personal accountability of the
individual rather than pro?t or loss, and on com-
pliance with parliamentary decisions concerning
revenue and expenditure rather than performance.
The material presented to the Treasury by B&B
naturally demonstrates a close concern with the
underlying personal accountability of o?ce-hold-
ers in a hierarchical system where the objective
was to demonstrate that payments had validly
taken place within delegated powers. They focused
on the need for o?cers to remain accountable to
their superiors and to Parliament by recommend-
ing a form of accounts which, while having the
650 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
characteristics of double entry, was designed to
give a narrative—a ‘‘running account’’ or
‘‘account current’’—of how ?nancial responsi-
bilities had been discharged. This was an under-
standable priority given that most government
departments continued to employ charge and dis-
charge accounting at this time.
B&B were thus predisposed towards retention of
the essential features and attributes of charge and
discharge accounting within the planned new sys-
tem of accounting. The literature shows these
concerns to have been shared in other sectors of
the economy including situations where the social
equals of B&B interfaced with business opera-
tions. Napier (1991) has revealed the concern to
retain a clear record of individual accountability
on the Bute estate in Glamorgan, south Wales, as
the transition from charge and discharge account-
ing to double entry bookkeeping occurred around
the time-period covered by this paper (see also,
Jones, 1985, chap. 2). Similar developments
occurred within local government (Coombs &
Edwards, 1996, chap 4). For example, although
the City of Bristol adopted double entry book-
keeping in 1785, the principal ?nancial statement
prepared for the year ending 31 August 1837 was
an ‘‘account current’’ that continued to be cap-
tioned: ‘‘Thomas Garrard, Treasurer of the City
and Borough of Bristol and County of the said
City in account with the Mayor, Aldermen and
Burgesses of the said City and Borough for the
year ending 31 August, 1837’’ (reproduced in
Coombs & Edwards, 1996, p. 38, p. 44).
One ?nds in the submissions made by B&B
ample explicit evidence of their commitment to
personal accountability:
the ‘‘Account Current,
26
is indispensable, as
the foundation of any other Account, and
as the only correct mode of striking a Bal-
ance’’ (BPP 1829, vi(a), p. 6).
the ‘‘Explanatory Ledger’’ is to be pre-
ferred because ‘‘inaccuracies, and even
frauds, may be much more easily prevented
or detected by the use of the greater detail
recommended’’ (BPP 1829, vi(a), p. 89).
27
‘‘the head of the Department should not be
precluded by the obscurity of the entries
from forming a ready judgement, by a per-
sonal inspection of the books, of the state
of the accounts, and of the care and ?delity
with which they are conducted’’ (BPP 1829,
vi(a), p. 90).
The focus on the personal accountability of the
individual may also be inferred from the statement
that ‘‘the Ledger Accounts are to consist princi-
pally of those forming heads of the Estimates
and the Accounts with Sub-accountants—the
Accounts with Contractors, O?cers on full and
half-pay and other persons not Sub-accountants’’
(BPP 1829, vi(a), p. 111).
We can therefore see how ‘‘the mercantile sys-
tem of double entry’’ label may have been accep-
table to both parties as standing for systematic
and ‘‘proper’’ accounting, but it is equally clear
that they interpreted the content and purpose of
the system in fundamentally di?erent ways. The
result is that, from the perspective of ‘‘giving an
account’’, B&B’s comments concerning the use of
‘‘sundries’’ gains substance that is not otherwise
immediately apparent. Within commercial
accounting, what matters is the total to be debited
or credited to a ledger account, as the aim is to
determine the balance; in the civil service, the
priority is to provide a narration that ‘‘sundries’’
palpably fails to do.
28
27
The emphasis on personal accountability and a detailed
record is also consistent with the need to check for evidence of
the corruption that was endemic in the old society.
28
The dispute between the two parties was re?ected upon by
a contemporary, Isaac Preston Cory, fellow of Caius College,
Cambridge, barrister at law, and a simple compromise pro-
posed (Cory, 1840, pp. 95–97). In Cory’s view, the accessibility
of relevant information could be conveniently achieved by
maintaining a journal along the lines preferred by Abbott and
the retention of narratives in the ledger along the lines advo-
cated by B&B.
26
Napier (1991, pp. 167–170), demonstrates the key role of
the ‘‘account current’’ in the accountability of Edward Priest
Richards, agent to the second Marquess of Bute between 1814
and 1948.
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 651
6.2. Public or government accountants
The resolution of the dispute concerning the
design of the system of government accounting
was seen to have signi?cant implications for the
type of person quali?ed to operate the new system.
Abbott accused his colleagues of ‘‘accommodating
their system to the capacity and convenience of
the individuals [presently] employed, rather than
suiting it unconditionally to the exigencies of the
public service’’ (BPP 1829, vi(b), p. 143). Further,
‘‘it is for attempting to perpetuate the system
adopted by public o?ces, of acting upon plans
framed to their peculiar transactions, that the o?-
cial plan of account recommended by Messrs.
Brooksbank and Beltz appears to me so repre-
hensible’’ (BPP 1829, vi(b), p. 145). Abbott argued
that action required to ‘‘e?ect any serious reform
in the present very defective mode of keeping the
Public Accounts’’ must inevitably involve hard
decisions, and B&B were accused of sycophantic
behaviour:
this di?culty must neither be disguised nor
misrepresented; still less ought the object of
this commission to be compromised by a
complaisant and courtly, not to say disin-
genuous desire to render the reform con-
templated palatable to the party to be
reformed. (BPP 1829, vi(b), p. 143).
Abbott also charged B&B with underestimating
the di?culties involved in reforming public
accounting: ‘‘book-keeping is not an art that can
be learned in a very few days, as Messrs. Brooks-
bank and Beltz seem to suppose’’ (BPP 1829,
vi(b), p. 143). He was adamant that the reforms
advocated could not be ‘‘carried into e?ect with-
out the introduction of one or two practical
accountants into each department of the Govern-
ment’’ (BPP 1829, vi(b), p. 143); ‘‘the practical
knowledge and experience of accounts acquired in
mercantile intercourse, or, to speak candidly, in
the counting-house,
29
appear to me indispensable
in introducing any good system into the public
o?ces’’ (BPP 1829, vi(b), p. 143). In addition to
Greenwich Hospital, Abbott had already installed
a ‘‘new system’’, under experiment, at the Navy
O?ce, for which he claimed the following advan-
tages: it ‘‘is understood by every man of account,
consequently the ability to detect fraud or error in
the accounts is not con?ned to individuals
belonging to the Department’’ (BPP 1829, vi(b), p.
21).
Abbott’s recommendations for meeting the
accounting manpower requirements of public o?-
ces were rejected by B&B: ‘‘we consider it to be
not only unnecessary, but highly inexpedient to
employ counting-house book-keepers from the
City (the ‘‘practical accountants,’’ alluded to by
Mr. Abbott) to introduce a system of book-keep-
ing in the public o?ces’’ (BPP 1829, vi(b), p. 143).
The grounds for their intransigence were two-fold:
‘‘besides being insu?cient for the objects to be
accomplished, [the accounts] would be, generally,
unintelligible to the o?cers of Government.’’
(BPP 1829, vi(b), p. 143). The civil servants also
rejected the allegation of disingenuity and
explained their objective of devising a suitable
system, consistent with the accounting expertise
presently available within public o?ces, in the
following words:
we should have ill deserved the con?dence of
their Lordships, if we have lent ourselves to
the views of our colleague, who has dis-
covered what appeared to us to be an extra-
ordinary anxiety to pave the way for the
introduction in the public o?ces, of a new set
of individuals; and to this end to deprecate
the persons now employed, of whose capacity
and attainments he has had no means of
forming a correct judgement. (BPP 1829,
vi(b), p. 143).
It is worth noting that disagreement about whe-
ther ‘‘a new set of individuals’’ should be brought
in to do the work continued long beyond the date
covered by this paper. For example, in discussions
on the form of the army’s accounts, in 1844, Sir
Henry Parnell argued that the introduction of
double entry bookkeeping ‘‘is a business which
29
For information on the nature and role of the counting
house, see Anderson (1976), Lockwood (1989), Previts and
Sheldahl (1977).
652 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
cannot be adequately accomplished without
employing a person who has had not only long
experience as an accountant, conversant with the
practice of the double-entry system, but who is
also possessed of a thoroughly scienti?c knowl-
edge of the principles of the system’’ (BPP 1844,
xxxii, p. 34). Such ideas continued to be resisted
by career civil servants with the leading Victorian
?nancial administrator, William Anderson, con-
vinced that ‘‘the attempt to introduce the system
without the aid of book-keepers from the city
would be successful; or, in other words, that there
is ample talent in each o?ce; and su?cient public
zeal, to carry forward the plan with complete suc-
cess, without deranging the existing establishments
by introducing a new class of persons into the
service’’ (BPP 1844, xxxii, p. 39).
7. Treasury verdict
The Commissioners’ con?icting reports were
duly considered by Lords Wellington, Goulburn
and Eliot whose judgement is contained in a
Board of Treasury minute dated 14 July 1829
(BPP 1831, xiv, p. 17). In their judgement, ‘‘this
di?erence of opinion has reference rather to the
manner of applying the mercantile system to the
accounts of the public departments, than to the
principle of the mercantile system, or to the expe-
diency of its adoption’’ (BPP 1831, xiv, Appendix,
p. 17). They articulated the di?erence between the
Commissioners as follows:
that while two Commissioners judge it expe-
dient to select only such of the rules observed
in the merchants’ counting-house as appear
to be perfectly consistent with the nature and
course of public business, Mr. Abbott con-
tends that the mode of regulating the
accounts of a merchant should, without var-
iation, be adopted in the o?ces of Govern-
ment. (BPP 1831, xiv, p. 17).
Given that the Commissioners’ reports were
evaluated by the Lords of the Treasury, it is per-
haps unsurprising that they should have favoured
the scheme advocated in the majority report pre-
pared by two Treasury employees. Nevertheless,
the Lords of the Treasury pinpointed a funda-
mental ?aw in Abbott’s uncompromising advo-
cacy of his version of ‘‘the mercantile or Italian
system of double entry’’ and the total unwilling-
ness to countenance ‘‘any material deviation from
that system’’ (BPP 1829, vi(b), p. 153).
It is known that the practice of merchants
and others in the arrangement of their
accounts is not uniform; the general mer-
chant, the less extensive dealer, the manu-
facturer, each keep their accounts in a
peculiar manner, adapted to their own busi-
ness; nor can any just reason be assigned why
the accounts of a public department, di?ering
as they do in many respects from every
branch of mercantile business, should not
have a peculiarity of system suited to their
particular nature and object. (BPP 1831, xiv,
p. 17).
The Treasury decided that the new system
should be introduced gradually and that ‘‘it is
probable that certain modi?cations may be sug-
gested in the several departments’’, which would
prove perfectly acceptable provided that ‘‘they in
no respect deviate from the general principle’’
(BPP 1831, xiv, p. 18). To facilitate the imple-
mentation of change, B&B were instructed to
‘‘place themselves in communication with the sev-
eral departments concerned, and a?ord them,
either in person or in writing, every necessary
information’’ (BPP 1831, xiv, p. 18). A further
acknowledged constraint on the implementation
of accounting change was the availability of per-
sonnel possessing ‘‘a thorough knowledge of
book-keeping by double-entry’’ (BPP 1831, xiv, p.
18). The Treasury did not see the recruitment of
public accountants as the appropriate solution.
Instead, they decided to permit postponement of
the adoption of the new system until the com-
mencement of the following ?nancial year, so
‘‘that time far more than su?cient will be a?orded
for their instruction’’ (BPP 1831, xiv, p. 18).
The ?nal episode in the dialogue between the
Commissioners occurred about 6 months later.
Abbott wrote to the Treasury on 27 November
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 653
1829 trying, as he saw it, to set the record straight.
He protested that ‘‘your Lordships have been
induced to look upon my labours in the commis-
sion with a less favourable eye than would other-
wise have attended them’’, and attributed this to
‘‘the wilful misrepresentations of others’’ and to
their Lordships ‘‘partial acquaintance only with
some of the points in controversy’’ (BPP 1830,
xxix, p. 2). He also made a number of references to
the more e?ective ‘‘diplomacy of my opponents’’
(BPP 1830, xxix, p. 10), and it certainly does seem
that he was out-manoeuvred, but the force of his
argument probably su?ered from the employment
of rather stronger language than one might expect
in a considered submission made to the heads of a
government department. B&B were favoured with
the opportunity to answer Abbott’s complaints
and were able to cite triumphantly the following
allegations made by him: ‘‘wilful misrepresenta-
tions’’—‘‘ridiculous distrust’’—‘‘hostile intentions’’
—‘‘prejudices from super?cial knowledge’’—
‘‘interpretations ingeniously made’’—‘‘exhibition
of tact and diplomatic address’’—‘‘unfairness’’—
‘‘animosity’’—‘‘want of candour’’—‘‘want of
courtesy’’ (BPP 1830, xxix, p. 15).
It is impossible, and probably unnecessary, to
allocate accurately the balance of responsibility
between the Commissioners for their failure to
produce a joint report. B&B were Treasury o?-
cials, however, and the report was being prepared
for their masters. From a tactical point of view,
therefore, it would appear to have been important
for Abbott to press his views, if at all possible,
through a general report. While some of the alle-
gations by Abbott verge on paranoia, there are
signs that his two opponents were treated in a
privileged manner. The short general report pro-
duced by Abbott—described as a ‘‘Memorandum.
On the Plan of Keeping the Public Accounts’’—
was printed, as noted earlier, with the observa-
tions and criticisms of B&B placed alongside (BPP
1829, vi(b), pp. 143–155). Later in the year, when
Abbott addressed his letter of complaint to the
Lords of the Treasury, B&B were again given the
opportunity to analyse and criticise his submission
with their ?ndings once more presented and
printed in columnar format (BPP 1830, xxix, pp.
2–15).
8. Concluding remarks
The catalysts for the imposition of more
demanding accounting regulations on British
companies during the nineteenth century were
often mismanagement and fraud. Explicit evidence
of fraud in central government had occurred at
Greenwich Hospital, and the risk of this happen-
ing under the existing system of record keeping
was undoubtedly a matter that concerned all three
Commissioners. It is also the case that, even in the
absence of fraud, accounting practice within cen-
tral government was considered de?cient in
important respects, with radicals such as Joseph
Hume, Sir Henry Parnell and John Bowring
pressing for its fundamental reform. The 1828
report of the Finance Committee, chaired by Par-
nell, expressed concern with the government
bookkeeping system’s failure to track the move-
ment of cash in an e?ective manner. We have also
seen expressed recurrent concerns with the serious
delays in reporting to Parliament the ?nancial
e?ects of transactions undertaken and in returning
unspent money to the Exchequer. Such short-
comings rendered it di?cult for o?cials and Par-
liament to assess the State’s ?nancial progress and
position and almost inevitably increased the risk
of undetected inaccuracies, deception and fraud. It
was in response to these kinds of concern that the
terms of reference issued to the three Commis-
sioners in 1828, on the advice of the Finance
Committee, directed ‘‘particular attention to the
consideration as to how far it may be practicable
and advantageous to employ the mercantile sys-
tem of double entry in keeping the public
accounts’’.
The 1828 Finance Committee’s support for the
adoption of ‘‘the mercantile system of double
entry’’ is unsurprising given its chairman’s respect
for this technique (Parnell, 1830, chap. 11), while
acceptance amongst heads of government re?ected
a growing belief in the potential contribution of
up to date accounting methods in achieving
‘‘cheap and e?cient government’’. The Lords of
the Treasury appointed the Commissioners towards
the very end of Britain’s industrial revolution; a
time that had seen the growth of business activity
and organisations through the exploitation of key
654 J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658
technical innovations and factory-based organisa-
tion of work. The development of o?ce procedures
in the counting house included the more wide-
spread adoption of double entry bookkeeping to
record and report the rising number and range of
transactions undertaken, as businesses grew in size
and complexity, as well as enabling the implementa-
tion of more e?ective internal control procedures
over the actions of a burgeoning o?ce sta?. It was
believed that central government could bene?t
from sharing in the potential of double entry book-
keeping as a means of providing better ?nancial
control and as a mechanism for generating more
extensive and reliable ?nancial data at a time
when a need for the accumulation of facts and
statistics to better inform government action was
increasingly recognised (Lubenow, 1971, p. 16;
Parker, 1993, p. 73; Perkin, 1969, pp. 326–368).
The Commission appointed to conduct the
inquiry comprised a leading public accountant,
experienced in commercial a?airs, and two senior
civil servants expert in the accounting practices of
government departments. Following their dis-
agreement and the receipt of separate reports by
the Lords of the Treasury, the establishment came
down unequivocally in favour of B&B. Why did
Abbott fail?
There were three matters at issue. The ?rst was
whether double entry bookkeeping should be
adopted. Here there was unanimity amongst the
Commissioners. The terms of reference from the
Lords of the Treasury anticipated the adoption of
‘‘the mercantile system of double entry’’, signal-
ling a predisposition in favour of change and a
recognition that the system of charge and dis-
charge accounting was failing. There had been no
recent rise in expenditure levels to serve as a cata-
lyst for accounting change (BPP 1868–1869, xxxv,
pp. 148–151), but the existing system had revealed
inadequacies for some time, with in?uential and
informed critics a constant source of embarrass-
ment to the government.
The second question centred on the version of
double entry bookkeeping to be adopted.
Although B&B’s plan required changes to be
made, it is equally certain that their scheme built
on the prevailing accounting arrangements within
at least some of the departments under investiga-
tion. Their reworking of the mercantile system of
double entry to produce a stewardship-oriented
version awarded high pro?le to the perceived need
to retain a full record of personal accountability
within the ledger. Abbott palpably failed to
demonstrate the speci?c advantages of his busi-
ness-oriented system of double entry bookkeeping.
Rather than argument, Abbott relied on emotive
language to demand the introduction of ‘‘the most
perfect system’’ known to business (BPP 1829,
vi(b), p. 144). Abbott’s presentations to the
Treasury were also marked by dismissive assess-
ments of the system presently in force, of the pro-
posals for change made by B&B, and of the
accounting expertise available within government
departments. It is reasonable to assume that these
allegations would require incontrovertible sup-
porting evidence if they were to ?nd favour with
B&B’s superiors. No such evidence was presented.
The third question was whether operation of the
new system should be the responsibility of
accountants from business or from the govern-
ment sector. The proposals put forward by the
‘‘professional accountant’’, as B&B described
Abbott, anticipated the employment of accoun-
tants from the business sector at either or both of
two levels. On numerous occasions, there was the
explicit statement of the need to employ ‘‘men of
account’’ in government departments, with even
the level of involvement measured as ‘‘one or two
practical accountants into each department of the
government’’. There is the further implication that
the government accounting system might best be
the subject of audit by ‘‘men of business’’, with
Abbott’s system possessing the virtue that it ‘‘is
understood by every man of account, conse-
quently the ability to detect fraud or error in the
accounts is not con?ned to individuals belonging
to the department’’. It is unsurprising that B&B
should resist these threats to the domain of gov-
ernmental bookkeepers and accountants through
‘‘the introduction in the public o?ces, of a new set
of individuals’’.
The con?ict of ideologies that underpinned the
dispute surrounding the second and third ques-
tions was no mere intellectual exercise, ‘‘[f]or
whichever class came, through the acceptance of
its ideal, to control the heart and mind of society
J.R. Edwards et al. / Accounting, Organizations and Society 27 (2002) 637–658 655
could, without itself taking over the State, indir-
ectly control government policy, the content of
legislation, and the methods of the adminis-
trators’’ (Perkin, 1969, p. 273). The landed class
continued to dominate Parliament until the late
nineteenth century and ‘‘e?ectively controlled
recruitment to the Civil Service until at least 1870
00
(Perkin, 1969, p. 272).
Yet neither contemporaries nor historians
have doubted that the capitalist middle class
were the ‘‘real’’ rulers of mid-Victorian Eng-
land, in the sense that the laws which were
passed and executed by landed Parliaments
and Governments were increasingly those
demanded by the business men and—which is
not necessarily the same people—their intel-
lectual mentors. (Perkin, 1969, p. 272).
‘‘The triumph of entrepreneurial ideal’’ was com-
plete by the late nineteenth century (Perkin, 1969,
chap. 8) but, in 1829, the battle remained to be won.
The episode examined in this paper occurred in
the period of transition between the old society
and the new; a period when their respective ideol-
ogies were competing for ascendancy. We have
therefore examined events at a time in account-
ing’s history when a growing respect for business
practices was su?cient to convince the govern-
ment of the need to adopt the mercantile method
of accounting, but there remained e?ective and
successful resistance at the operational level to any
change in the nature on the purpose of such
accountability. The result was the introduction of
a new form of accounting that may have provided
a more accurate and complete record of central
government ?nances, but the principal focus on
personal accountability, rather than performance
assessment, stayed in place and the control of
government accounting by civil servants rather
than ‘‘men of account’’ remained secure. The out-
comes of this dispute stretch down to the present
day with the British government only very recently
deciding to radically revise government account-
ing by introducing so-called ‘‘resource accounting’’
and adopting private sector, accruals-based,
accounting practices for record keeping and
?nancial reporting purposes.
Acknowledgements
We gratefully acknowledge contributions from
participants in a seminar held at Deakin Uni-
versity, Burwood Campus, Melbourne, January
1998, from those attending the presentation of this
paper at the 21st Annual congress of the European
Accounting Association, Antwerp, Belgium, 6–8
April 1998, and from Brad Potter. We are parti-
cularly appreciative of the insightful criticisms,
comments and suggestions made by the two
anonymous referees and the encouragement pro-
vided by the editor of Accounting, Organizations
and Society. Any errors that remain are of course
our own. The research was ?nanced by the Scot-
tish Committee on Accounting History of the
Institute of Chartered Accountants of Scotland.
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