ABSTRACT
The development of the large-scale limited liability company was closely associated with the emergence of the absentee investor and the hierarchical system of professional management. These groups required financial information as the basis for resource allocation decisions (management) and in order to assess the state of their investment (shareholders), but it was completely impracticable to allow all of them direct access to the ledger. Even where access was a possibility, it would not have helped very much. Except for personnel involved in the minute detail of financial control, users are rarely interested in the balance on an individual ledger account; their focus of attention is more likely to be the financial effects of a range of transactions. Summarisation of these transactions in the form of financial statements is an essential first step before an assessment of progress can be made.
