ABSTRACT
Most students are enchanted by double entry bookkeeping, once the logic falls into place in their minds. The neatness with which an income statement and statement of financial position (or profit and loss account and balance sheet for the more traditionally minded) are derived from the system of dual entries, balancing off and creating a trial balance seems wonderful. All the labour of posting entries, getting it to balance, finding and correcting errors and producing the statements is rewarded. Such a precise system, so structured and such a sense of having found the right answer. No wonder Luca Pacioli, who published the first treatise on double entry bookkeeping within his mathematical work Summa de arithmetica, geometria. Proportioni et proportionalita (1494 in Cripps, 1994) said ‘without order, there is chaos’. Disenchantment follows, of course. Dickens (in Little Dorrit) refers to the
accountant’s work as ‘the professional enjoyment of a mess in the course of business’ and he was right: accounting is messy. At a record keeping level,
before entries are even made into the ledgers, paperwork contains errors which take an age to resolve. Then there are omissions in data entry, delayed payments and apportionments of costs to different projects or departments that result in a rush of angry exchanges with colleagues by telephone or email. The practising accountant does not have the reward of creating a financial statement: everything is done by computer and a major task for accounting staff is to fix the errors and queries thrown up by the system. Outputs are crafted in the form of reports, spreadsheets and presentations and journal entries to ensure that the financial reports comply with accounting standards take up much of an accountant’s time, along with conversations with colleagues, clients, customers and so on. As Pacioli is also said to have observed: ‘Though a business person’s head has a hundred eyes, there are still not enough for all their duties’. At a higher level, the production of reports for internal and external
consumption is subject to sets of rules and routines beyond the processing of monetary transactions. External reports are subject to accounting standards, which are contested and ever evolving. Adjustments are made to the final figures based on the requirements of standards – or to mitigate bad news. The narrative supporting the financial statements needs to be constructed. Internal reports may be subject to fashions and fads in management accounting and performance measurement practice. Audit systems, taxation systems and business mores all affect, and are affected by, accounting information. Within this paragraph there are signs of structures of how accounting is done, social institutions, and individual and group actions. How do we understand and untangle what is what, and is structure and agency an appropriate way to understand why accounting is done in the rather complex way that it is done? The complexity of the relationship between accounting, structure and action
is illustrated by some work that I carried out last year looking at costs and prices in the food industry. I was examining manual accounting books from the 1920s to the 1950s from a well-known company who made preserves such as jam and marmalade. The standard costing book from the canning plant was simply beautiful. Each page set out the cost of a different size of tin can in fine handwriting, all the figures neatly aligned in columns, each calculation neatly ruled. Every cost down to the solder used (with a note implying that women operatives might use more solder) was recorded and so the standard cost for making one tin can was adjudicated. A nice, functional artefact looking at the book just as it was. Looking at it another way, the little book of costs for tin cans is evidence of wider social structures. The clerk who
drew up the book was the product of an education system that prepared teenagers who could write a clerical hand and do mental arithmetic. In fact, my own grandmother was a product of this system. She could still cast (add up) a long list of figures in her head well after she retired and used copperplate handwriting through to the last codicil on her will (she died at the age of 96 in 2009). The clerk would have had a fixed role in the company and in society defined by their salary, with advancement probably available on attendance at night classes. The process of standard costing was widespread and advocated because managers can use it to control production costs and people’s behaviour. Deviations from standard cost can be monitored and corrective action taken – either to the numbers if costs have changed or to people’s working practices if that is the problem. The standard costs are part of pricing and budgeting systems. There is a separate manufacturing accounting ledger, which I also examined, where the aggregate costs roll finally into the income statement and the surplus or deficit rolls into the statement of financial position. Before the Second World War, there are significant profits in the industry partly due to exports to the British Empire. After the war profits (and the quality of the clerks’ handwriting) decline, and taxation increases. The brand still exists but the company was gradually absorbed by others through acquisitions and mergers. Accounting technologies both shape the way in which work is done through providing means for increasing surveillance, and are themselves shaped by other technologies which subsume the need for clerks with neat handwriting and a talent for mental arithmetic. The first step here is to sort out the confusion between the observation
that accounting tasks are structured activity, the extent to which accounting systems are used to create and maintain structures within organisations, and the extent to which accounting practices and accountants are situated within social structures.
