Richard Macve

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• MA MSc
• Professor Emeritus at London School of Economics and Political Science

I review how my work on accounting history has been made possible through collaboration with experts in various fields.

It has long been argued that double-entry bookkeeping (DEB) was important for enabling capitalism's development in the West and heralded the beginning of “modern accounting.” However, these claims remain contested so it is important to understand the history of DEB's emergence about 700 years ago and its underlying rationale. Sangster (2018a) argue...

A history of corporate financial reporting in Britain, by John Richard Edwards, New York and Abingdon, Oxon, Routledge, 2019, xxv + 380 pp., illus., £84.84 (hardback), ISBN: 9781138553187; £36.44 (e-book), ISBN: 9781315148441

Purpose The paper reviews some theoretical approaches that have been adopted for understanding the drivers and achievements of the Chinese professional project and the challenges it faces for the future, as a complement and a contrast to previous histories of China and to studies of other developing economies. Design/methodology/approach Based mai...

Based on gaining privileged access to interview senior representatives of audit firms, regulatory bodies, financial institutions, universities and other organisations in mainland China, Hong Kong and the UK, this exploratory study presents a range of informed views about the rapid development of China’s auditing profession over the last 25 years. I...

Claims have repeatedly been made for the importance of double-entry bookkeeping (‘DEB’) for capitalism’s development in the West, so it is valuable to explore the bookkeeping and accounting practices of economically successful organisations elsewhere. Our paper reports our exploration into the original account books contained in the archive of Tŏng...

We explore the genesis of the modern power of management and accounting, reviewing two historical episodes that have been claimed to embody aspects of this modernity. For our analysis we distinguish two aspects of double-entry bookkeeping (DEB): first, the basic bookkeeping technique of cross-referencing and analysing doubled entries (Sangster, 201...

This paper asks how far we may expect the IASB’s current approach to revising its Conceptual Framework (CF) – as set out in the recent Discussion Paper on further chapters of the revised Framework – to help overcome difficulties such as those identified by Barth, M.E. (20138. Barth, M. E. (2013). Global Comparability in Financial Reporting: What, W...

By developing a synthesis of documents that have been released officially under the revenue recognition project jointly run by the International Accounting Standards Board and Financial Accounting Standards Board, this article points out that the earning generation and realization process over time (that is to say, the traditional accounting model)...

This paper is based on my presentation given as part of a panel discussion at the 2012 Annual Meeting of the American Accounting Association in August 2012 in Washington DC. To the other panellists' papers (Glover, 2013; Zeff, 2013b) I add a contrasting perspective from other countries (primarily the UK and the rest of Europe) that incorporates a v...

To help understand modern financial accounting theory (FAT) and its role in the development of finance and business, I consider two current mainstream histories of its development and offer a third alternative. The standard setters’ version is that increasingly FAT is rationally derived from a basically coherent conceptual framework, currently focu...

I ask how far we may expect the IASB’s current approach to revising its Conceptual Framework ('CF') — as set out in the recent Discussion Paper on further chapters of the revised Framework — to help overcome difficulties such as those identified by Barth (2013), who sets out the case for the importance, within IASB’s aim in its CF to achieve intern...

This paper is based on my presentation given as part of a panel discussion at the 2012 Annual Meeting of the American Accounting Association in August 2012 in Washington DC. To the other panellists’ papers (Glover, 2013; Zeff, 2013b) I add a contrasting perspective from other countries (primarily the UK and the rest of Europe) that incorporates a v...

Goody (1996: The East in the West) contests the arguments of Weber and others that Western accounting developments — and in particular double-entry bookkeeping ('DEB') which first appeared in Italy around the end of the 13th century AD — provided a new calculative rationality that drove the economic transformations of early capitalism. Recently Gle...

To help understand modern financial accounting theory ('FAT') and its role in the development of finance and business, I consider two current mainstream histories of its development and offer a third alternative. The standard setters’ version is that increasingly FAT is rationally derived from a basically coherent conceptual framework, currently fo...

The Committee is concerned with a number of options and exceptions introduced by the 2011 ED. These options and exceptions allow alternative accounting models. Their retention on a contract-by-contract basis may create confusion for both preparers and users of financial reporting. It may leave room for intentional misstatements and structuring oppo...

The recent rapid growth of China’s economy has reopened historical debate about the extent to which it prospered during the Ming and Qīng dynasties (1368-1911) through developing a significant market orientation on the base of its underlying agricultural bureaucratic feudalism. As a contribution to this debate, we question here the extent to which...

Purpose – The equator principles constitute an international voluntary code developed by banks to encourage consideration of environmental and social issues in project financing. Such codes can flexibly bridge the gap between individual companies' sustainability initiatives and mandatory, legal regulation. However, concerns continue to be expressed...

In seeking to replace accounting conventions by concepts in the pursuit of principles-based standards, the FASB/IASB joint project on the conceptual framework has grounded its approach on a well-known definition of income by Hicks. We welcome the use of theories by accounting standard setters and practitioners, if theories are considered in their e...

At the beginning, we should note that although IASB/FASB now loosely talk of ‘the measurement objective’ this is conceptually confusing, as issues related to accounting measurement cannot be considered independently of the context of some accepted underlying objective for financial accounting and reporting, something with which the IASB and FASB ar...

The ASB, FASB and IASB all have on their agendas a major project on revenue recognition in financial statements. Methods of revenue recognition and measurement can conflict with methods of liability recognition and measurement. We explore here (by reference to the examples of a magazine subscription and a short-term insurance policy) when the two m...

Revenue recognition and measurement can conflict with liability recognition and measurement. We explore here under different market conditions when the two measurement approaches coincide and when they conflict. We demonstrate that the conflict most generally arises over deciding how to treat situations where enterprises expect to earn ‘super-profi...

'Fair value' is currently the central topic of debate in the development of accounting standards. While it has now been defined to mean an exit price in US GAAP, the IASB is still considering its own definition, and some commentators are arguing for versions of entry price, or for differing prices in different circumstances or for different types o...

Embedded value has been widely adopted by European and Canadian life insurance companies for supplementary performance reporting and increasingly by US insurers for management purposes. It has important implications for the international debate over the appropriate use of fair values in financial reporting. But EV has still not been accepted by sta...

Revenue recognition and measurement principles can conflict with liability recognition and measurement principles. We explore here under different market conditions when the two measurement approaches coincide and when they conflict. We show that where entities expect to earn ‘super profits’ (residual income) the conceptual conflict is exacerbated...

This chapter addresses the following double question: precisely how and when did the modern practice of strategy and its theorization emerge? What is its historical and thereby present link to accounting? Section 8.2 briefly considers the nature of 'disciplinary' power, and what it means to say that strategy, as a form of knowledge as well as of po...

The chapter discusses “real-life” experiences in using semi-structured interviews in qualitative research. The reasons for using semi-structured interviews, the design and development of the questionnaire used, the process of interviewing and choice of interviewees, and some of the problems encountered and overcome are presented in the chapter. The...

How have the power and organisational effects of modern accounting systems developed? What is the appropriate theoretical framework for interpreting that development? Researchers in the ‘Neoclassical’ tradition of ‘economic rationalism’ focus on tracing how efficiently developments in accounting techniques, from the British Industrial Revolution (B...

Accounting historians have attempted to relate their knowledge of the variety of accounting practices at various points of time, and in various places, to wider questions of the role of accounting in reflecting and shaping not only business and management practice, but also economic and social organization more generally. Finley's classic The Ancie...

The 1970s and early 1980s saw significant structural change in the insurance market at Lloyd’s of London and it became increasingly difficult for providers of the collateral against which insurance was written to monitor the activities of those responsible for writing the insurance risks and determining the distribution of returns. Agency theory an...

The LASC is pursuing proposals for accounting for financial instruments that are conceptually flawed and unworkable in practice. “Fair value” has been elevated to a catch-all concept to resolve measurement issues objectively. Adoption of fair value, as cuwently interpreted by standard-setters (eg, by the FASB in Concepts Statement No. 7, issued in...

In attempting to understand the genesis and scope of modern cost and management accounting systems, accounting historians adopting what has been labeled a “Foucauldian” approach have been rewriting the history of key 18th and 19th century developments in the U.K. and U.S. through new evidence, new interpretation, and a refocusing of attention on fa...

The life insurance industry has been experimenting in various ways in recent years with current value based accounting in order to report financial performance on a more realistic basis. Standard setters have also now begun to develop proposals for standardising current value based accounting for insurance companies, and the IASC's Steering Committ...

Bryer (1999) reiterates criticisms of the “balance-sheet” approach underlying the FASB's conceptual framework as failing either to explain or guide the development of financial accounting practice, and aims to demonstrate how operational and objective principles of financial accounting can be derived from Marx's labour theory of “surplus-value”. Ho...

Economic arguments in support of increases or decreases in accounting and auditing regulation have generally not been supported by empirical evidence as to the magnitude of the costs and benefits. The step-change in the scale of such regulation at Lloyd's between 1982 and 1985 provides evidence which enables us to calculate sufficient of the increm...

The Association of British Insurers' (ABI) proposals for an 'accruals' method would have the effect of 'front-loading' profits reported on life assurance business compared with the traditional 'statutory solvency' basis. The ABI argued that adoption of the method would lead to a more realistic valuation of life company shares. This research tests t...

This paper scrutinizes the Lawrence Manufacturing Co. accounts in the 1840s and challenges the inferences that have been drawn in previous literature both about the degree of sophistication of cost accounting practice that the accounts of such textile mills exhibit during this period and about their use for management purposes. The accounting compu...

In accounting history, authors who have adopted a ‘Foucauldian’ approach have recently debated with those representing the ‘Neoclassical’ school of thought the relative sophistication and significance of cost accounting developments in the UK and US respectively during the late 18th and early 19th centuries. This paper argues that the differences b...

In response to various pressures, businesses have begun to report externally on theirenvironmental policy and performance. The significance of such external reporting depends onthe extent of changes in management culture and systems and on how new measures influencemanagement decisions. The 'greening of accountancy' involves a reappraisal of how to...

In a 1977 publication Alfred Chandler singled out the Springfield Armory as the site where single-unit management was pioneered in the United States, crediting Superintendent Roswell Lee (1815-1833) with establishing a first “managerial” approach to work discipline and labour accounting. However, as economic breakthrough came only in 1841/2, it has...

In recent years there has been increasing interest shown in the history and development of accounting practices; accounting records are an important source of historical data, and they can also provide evidence of varied organizational structures and systems of management control. This volume brings together published work by the major British scho...

At its beginnings in the late sixteenth century, UK life insurance was originally short-term, often one-year, insurance. Its development into a long-term investment medium exposed a tension between the emerging commercial accountancy conventions for stating financial position and results, based on past transactions, and the forward-looking, actuari...

During the last decade there have been many changes in the regulation of UK financial institutions designed both to increase competition and, through ‘self-regulation’, to improve accountability to clients and providers of capital. Much of the regulatory framework imposed by the state is embodied in the Financial Services Act 1986 (FSA) and in the...

This review article sets out the Johnson and Kaplan diagnosis of the ‘problem’ with modern US cost accounting and management control systems (‘MAS’) and challenges both their historical analysis and their proposed remedy. It traces the genesis of the knowledge-based disciplinary power of managerialism from the 1830s in the US and contrasts the deve...

A quoi sert un indicateur de satisfaction des usagers dans la gouvernance d’une collectivité territoriale ? Telle est la question à laquelle cet article tente d’apporter des éléments de réponse. S’appuyant sur les travaux analysant le contrôle de gestion comme un outil de gouvernance disciplinaire, l’étude proposée de huit indicateurs montre que le...

El objetivo general de este trabajo es el de ofrecer un perfil completo de los or�genes, la evoluci�n y el multiforme desarrollo de la historia de la contabilidad en Espa�a, as� como de su posible evoluci�n futura. Haciendo referencia a las actividades cient�ficas y a los estudios m�s recientes se ha intentado mostrar el notable grado de desarrollo...

Part I: the UK and continental Europe Financial support from the P.D. Leake trust (a trust associated with the Institute of Chartered Accountants in England and Wales ('ICAEW')) is gratefully acknowledged. The Centre for Business Performance manages all grant applications. We are also grateful for financial support and technical advice from Deloitt...

Preliminary note: The status of this FASB/IASB 'communications' paper (dated May 2005) on 'a new conceptual framework project'1 is not entirely clear. It is written by FASB and IASB staff members (Halsey G. Bullen and Kimberley Crook) but does not carry any of the customary disclaimers as to the status of staff opinions relative to the Boards' need...

Archival historical work has been re-evaluating the role of accounting and early management practice in the BIR. Interpretations have been offered both by 'economic rationalist' (or 'Neoclassical') historians and by 'Foucauldian' historians. Recently Bryer has argued for a 'Marxist' accounting and management history in which the accounts played a c...