Editorial

The November issue includes six articles, along with the call for research proposals to the Accounting History International Emerging Scholars’ Colloquium (AHIESC), which will be held as part of the Eleventh Accounting History International Conference (11AHIC) being held in Portsmouth, United Kingdom during 8–10 September 2021. The call for papers for the 11AHIC and for the upcoming Special Issue: Accounting History and Exploitation of the Natural World are also included.

Authors drawn from France, Portugal, Italy, the United Kingdom, and the United States have written the articles, and this issue intends to respond to the call for biographical studies (Butterfield, 1955; Cowton, 1985; Parker, 1977; Rowse, 1946) which have long been central to historical accounting research (Previts et al., 1990). The first four articles in this issue deliver specifically human-oriented histories while the final two articles present a balanced consideration of the importance of human agency and interdisciplinary links in the development of accounting, as stated by Carnegie and Napier (1996), Napier (2009) and Carnegie et al. (2020).

Butterfield (1955) concurs that historical research returns the human aspect of accounting firmly to the centre when it delivers specifically human-oriented histories such as biographical studies (p. 2). He recalls the address delivered to the Historical Association at its annual general meeting at Cambridge on 31 December 1953: ‘The genesis of historical events lies in human . . . From the historian’s point of view, it is this that makes the world round. . . It is men [individuals] who make history’.

Following Butterfield’s (1955) statement that ‘even the “history of thought” may lead to deception unless we regard it as rather the history of people thinking’ (p. 2), the article by Fournès highlights the figure of Lucien Bailly as an activist of the protection of the interests of minority shareholders at the beginning of the twentieth century in one of the major joint stock companies in the mining sector in France. Bailly became the brother-in-law of the company director: despite his privileged position, Fournès offers a vivid picture of his ‘behind-the-scenes’ actions and the use of press campaigns to condemn covered-up profits and denounce the allocation of the capital surplus for the exclusive benefit of the company directors. Through the examination of the archives of Pont-à-Mousson, Fournès reports private negotiations, memos and letters, speeches during general meetings, press campaigns, conferences and books, proxy fights, and finally, political actions which led to the establishment of a Shareholders’ League and left a long-lasting legacy of strategies that several minority activists can tap into to pursue their objectives.

The second article by McDonough, Miranti and Schoderbek recasts Alfred Chandler’s (1977) approach on ‘integrated learning base’ into an accounting-based framework which provides novel information for organisational decision processes and reporting to external stakeholders on intellectual capital and corporate innovation. The Authors praise Chandler’s belief that the successful firm is one that can apply its knowledge in ways that maintain strong capabilities to sustain competitiveness in its major markets. This belief is articulated in the recognition of precise technical, functional and managerial capabilities, which contrasts with Jensen and Meckling’s (1976) view that successful firms are those capable of managing a portfolio of financial investments and contracts. Chandler’s articulation offers a unique opportunity to re-classify and measure any costs and benefits associated with intellectual capital and corporate innovation. The Authors not only shed light on the shortcomings of the current accounting frameworks, including voluntary disclosure, in capturing intellectual capital and corporate innovation but provide useful examples of the application of Chandler’s ‘integrated learning base’ to reporting models by explicitly introducing algorithms of calculation and accounting adjustments on learning costs and innovative activities. In doing so, they demonstrate how bridges may be formed between business history and accounting practice and between qualitative and quantitative research based on the concepts of knowledge capabilities and innovation.

The third article by Antonelli, Bigoni, D’Alessio and Marcello rediscovers the academic life and thought of Tommaso Zerbi, medievalist and politician, who contributed to disentangling the intense debate about the origins of double-entry bookkeeping of two opposite Italian schools of thought. One was supported by the nascent Zappa’s conception of the firm and its accounting system around its capacity to produce (and calculate) profits, while the other was consistent with the well-established Besta’s conception of the firm as a stock of capital whose accounting system reflected the specific owner’s interests in using that capital.

Zerbi offered a set of characteristics to recognise the emergence of double-entry bookkeeping in archival documents. His distinctive conception of double-entry bookkeeping was fully consistent with the main tenets of the profit-centred vision of accounting systems as opposed to a capital-centred vision. By undertaking an extensive archival search in ancient medieval accounts books Zerbi found early evidence of the adoption of double-entry bookkeeping. By encompassing and broadening the extant accounting research in the twentieth century, Zerbi legitimised and supported the spread of a profit-centred conception of the accounting system by demonstrating that the first accounts using double-entry bookkeeping were consistent with Zappa’s thought.

Mari, Picciaia and Sangster’s contribution closely follows the fil rouge of the double-entry bookkeeping method by articulating the leading impact of Dominico Manzoni’s (1540) teaching manual on accounting education. The Authors outline how accounting education in the fifteenth and sixteenth century was developed through a mix of abaco schools, and practical experience till the popularisation of Pacioli’s (1494) mathematical explanation of the double-entry bookkeeping method. Abaco schools had a prescriptive, not explicative approach to learning; mnemonic-analogic and operative, and inductive rather than deductive. This orientation was followed by the involvement of students in the real-world mercantile environment: the workplace. While Pacioli’s mathematical explanation introduced the possibility of a new framework for independent learning of the student based on principles rather than rules, his contribution was accessible only to rich merchants who could afford to buy and read his work. Manzoni’s (1540) manual is considered the bridging link for the completion of the accounting education revolution initiated by Pacioli. Following the Authors’ close analysis of the manual, the way Manzoni presents his material owes much to his experience as both a computista working as an accountant in business, and as a magister abacus teaching classes in abaco schools. While contextualising all the transactions to mercantile life, his manual orders uses this contextualisation to prioritise pedagogy over reality. Manzoni’s relevance in spreading the double-entry bookkeeping system to accounting education sits in his interest to make that knowledge available to all, particularly those who were unable to become expert in that method. His pedagogical strategies are at the basis of current teaching manuals.

The last two contributions of this issue close the link with the first two articles by presenting accounting systems as a reflection of social practice and ‘histories of thought’. Pierotti, Capocchi and Orlandini’s article explores the accounting documents of the nineteenth century Pio Istituto Teatrale (Milan, Italy) to convey the dual nature of this organisation, which was dedicated to protecting both social welfare and the arts by providing some sort of social protection to artists in times of financial hardship. The Authors link their findings to the mutualist movement in Italy, which assumed its own characteristics from the mid-nineteenth century, driven first by the Mazzinian ideas and then by the increasing influence of several social forces: Catholicism, socialist theories, and liberal philanthropy. The realisation of benefit evenings ensured the generation of a sizable income by appealing to the artistic tastes of the public. In addition, the members’ financial contributions allowed the economic survival of the Istituto and its artists during difficult times. The accounting data help to understand and trace the changes within the Istituto and in its social context.

Cardao-Pito’s article taps into Donleavy’s (2019) ‘Inquiry into the origins of fair value accounting’ (p. 253–268), published in this Journal. The critical piece by Cardao-Pito contributes to the important effort towards connecting economic theories and accounting practice. The advocates of fair value contend that market values would be superior to historical costs for reporting accounting items because markets would continuously process information regarding discounted forecasts of future cash flows, which is ‘fair’. Cardao-Pito critiques the assumed links between Donleavy’s concept of ‘fair value accounting’ and the theories of Turgot, Cantillon and Smith regarding prices/value. Cardao-Pito thoroughly examines the latter theories that are based on the concept of ‘price’ instead of ‘value’ and have never fully acknowledged that markets compute prices according to the rational expectations of discounted cash flow forecasts. The Author outlines the strengths and weaknesses of Donleavy’s elaborations on ‘fair value accounting’. He remarks the historical period in which ‘fair value accounting’ considerations emerged and warns about the appropriateness of using ‘fair value’. In particular, he warns about the difference between ‘fair value’ and ‘market value’ of specific accounting items. Owners’ and shareholders’ interests of information, stakeholders’ interests of information, and the circumstances of the company limit the current use of ‘fair value’ in accounting systems. Cardao-Pito adds to the link between financial economic theory and accounting.