ABSTRACT

Chapter 9 picks up on a ‘challenged, and hence unfinished, business’ theme. Chambers’ epigraphs to the Prologue are brief examples of what he described elsewhere as ‘jottings’ and ‘scribblings with rigour.’ They show considered thinking about a wide range of accounting matters. Present standards-based accounting is shown to be a flawed technology, more the product of political compromise between business and regulators than a proper functioning instrumentation system. Chambers regarded this as folly, bereft of wisdom, unbecoming of an enduring device formalized over 500 years ago in the Renaissance to improve commerce.

One major unfinished business was a proposed monograph. Chambers had begun, Wisdom of Accounting, a play on Hanbury Brown’s 1986 Wisdom of Science that had shown how progress since the sixteenth century had much to do with better appreciating through a scientific analysis how practical things worked. This was largely brought about by the advent of printing and the divorce of church and science. Similar events had influenced accounting. Material in the Chambers Archive reveals he had scoped the book but made only minimal inroads. He had confided to the present authors and other Sydney colleagues that much of the evidence for the book was his Thesaurus. Wisdom was to address further what Chambers clearly perceived an ongoing need to fix the disarray of accounting. While some reforms had occurred, many major problems with accounting remained virtually as they were when he began his business career in the late 1930s and academic career in the 1940s. Wisdom would show what academics and others still needed to do more than half a century later.

Ten years after Chambers’ death the disarray manifested itself in the accounting criticisms emanating from the aftermath of the GFC—primarily in the areas of fair value accounting, loan loss provisioning and accounting for groups, especially inadequate group reporting of the activities of financial institutions’ off-balance sheet ‘shadow banks.’ That disarray underpins chapter 9’s summary of what he felt still needed to be done to produce a system of accounting that is relevant and reliable. This includes a call for his ideas, which had been partially implemented (namely, the market price elements of the more recent ‘fair value’-based standards) by accounting standards setters, to be further tested.

A related unfinished business is the need for accounting education reform. Chambers observed that any effective change to practice required concomitant changes in the way accountants were educated. Chambers had alerted the academic community to this in several works in the early to mid-1960s and again in the 1980s and ’90s.