Editorial

The November issue of Accounting History is the last one in 2022. It includes seven research articles, the vale for Professor Hiroshi Okano (Osaka City University, Japan) from Eiichiro Kudo, and the calls for papers of three upcoming Special Issues: ‘Accounting History Research in the Age of Digitalisation’, ‘Accounting for Death: An Historical Perspective’ and ‘Historical Accounting for Enterprise and Society in Africa’. We encourage you to examine these opportunities carefully and to contact the Guest Editors should you need further clarification.

Authors drawn from Lebanon, Finland, Canada, France, Portugal, Italy, Australia and the UK have written for this issue, with articles spanning from the eighteenth to the twenty-first centuries. The research articles in this issue provide valuable insights into the varied contexts of financial and management accounting practices. The contexts analysed span from developing countries to a telecommunication giant, and from Canadian colonial settlements to French industrialisation and Catholic religious institutions. Finally, the issue expands the biographical genre through an in-depth exploration of the career and contribution of two renown accounting figures.

The first article by Sadaka analyses the challenges of IFRS implementation in an emerging economy such as Lebanon. After the first phase of implementation, characterised by the dominanting influence of global institutions such as the World Bank, Sadaka demonstrates how historical country-specific socio-economic factors have subsequently affected and challenged such implementation. Using a system, society, and dominance (SSD) framework, the author lists such factors as interpersonal relationships, family networks, political connections and sectarian affiliations in private and non-private sectors. These provide the basis for the allocation of resources and jobs in the country. Sadaka identifies the long-rooted influence of two broad political groups as the main reason for the schism over IFRS compliance in Lebanon. He analyses how their divergent social and economic perspectives affect Lebanon's regulation, education, and accounting professionalisation.

The second article by Rautiainen, Järvenpää and Mättö focuses on the shift in accounting practices in Nokia, a Finnish telecommunication corporation, and their historical impacts on shifting perceptions of organisational success and failure. Relying on the framework of institutional work, the authors consider such changes during the rise and fall of Nokia, from the 1990s onwards. During the rise of Nokia, the authors recall the original separation of financial accounting, whose function was progressively integrated into Nokia's headquarters, and management accounting practices, which were included in core operations and tended to attribute value to the traditional Finnish work ethic and long-term success. The move to US standards, required for Nokia's NYSE listing, pressured Nokia towards a financial and management accounting convergence to satisfy the increased frequency of the reporting (IFRS and non-IFRS) and short-term investors’ demands. During the fall of Nokia, the authors highlight the emergence of a non-IFRS reporting style and the differences between the IFRS reported earnings and the non-IFRS announced and released earnings, with the latter figures being more optimistic than the former ones. While these differences were ascribed to reorganisation and restructuring, non-IFRS figures were proposed to both investors and managers as the new basis for performance rewards. These shifted internal perceptions of success by failing to address, or creating delays in addressing, the actual decrease in the market performance of the whole corporation. This article shows how the perception of relevance and reliability of accounting figures changed according to the type of reporting developed, and in turn, created ambiguity in the actions and work practices needed to support long-term success.

The third article in this issue is from Baker. Set in the context of a British settlement in Canada, the author furthers an interesting and thought-provoking argument, that the long-term success of the town of Guelph in Ontario (Canada) was embedded in the spaces where short-term accounting objectives were partially suspended. Baker analyses the scheme of settlement in Upper Canada brought about by the British government to solve its internal issues, such as a surplus of population and unemployment, by the creation of overseas local economies for tax revenue purposes. He points out that a private company was chartered to purchase land from the government and resell it to settlers at a profit. That company was also in charge of encouraging emigration, providing land improvements, and making payments to its shareholders. Using an agency theory approach, Baker unveils the tensions between Mr Galt, secretary (agent) of the company, and the Court of Directors, based on the usage of accounting. The author reports that the main conflict arose when Mr Galt showed an interest in the immigrants’ welfare and community-building in the town of Guelph, in contrast with the short-term profit orientation of the company. Further, Baker suggests that Mr Galt's accrual accounting approach delivered a discourse of the company's ‘investment’ in welfare, rather than a discourse of a company's ‘financial distress’ as represented by the required cash-flow accounting approach. Failing to provide the accounting reports based on a cash-flow approach created the space for Mr Galt to pursue its agency and serve the interests of the local community while inhibiting the ability of the company to manage at a distance. The author thus argues that the absence of accounting favoured social objectives.

Almost contemporary to the colonial settlements of the British Empire, France was experiencing a surge of industrial (cost) accounting next to, or integrated with, the double-entry bookkeeping method. This fourth article by Levant and Zimnovitch is based on an extensive analysis of the accounting publications, textbooks, and specialised accounting associations’ holdings between 1820 and 1880 that document the lively debate about and changes in cost accounting methods (industrial and farm accounting) in France. According to the authors, accuracy in the determination of true cost prices was the aim of cost accounting in the nineteenth century, with emphasis on the allocation of indirect costs and depreciation of tangible and intangible assets. While industrial accounting was gaining increased legitimacy due to the spread of industrialism and scientific knowledge, its complexity also increased. A call for simplification was seriously considered in the railway sector, where marginalist ideas, based on complex but precise mathematical tools, were not easily operable in that century. The simplifications proposed were based on pragmatic engineering equivalences, such as the use of ‘equivalent (traffic) units’ of transport for passengers (carriage classes), goods or horses. Although less precise, these methods ensured operability and were soon embraced by other industrialists, through trial and errors. The authors contrast the railway sector's application to the agricultural sector (farm accounting). The latter attracted more attention in the period considered due to the spread of agronomists, farmers, and teachers as farm's managers. Moreover, the agricultural sector was considered superior to the industrial sector of the economy at the time, and farms were far more complex than firms. Despite the use of double-entry bookkeeping records, the complexity of farm accounting was highly criticised. Criticism was directed to various factors: the multiplicity of accounts, books, and records to differentiate crops’ profits; the extant multiplicity of internal services credited to ‘special’ account;, inconsistencies of practices; difficulty in allocating the pre-paid expenses (such as fertilisers, ploughing and sowing) included in the inventory to different crops; and extant geographical differences in the cost price of wheat. The authors conclude that the ensuing controversies did not lead to practical solutions, instead, they led to a complete disinterest in farm accounting.

The fifth article of this issue by Gomes, Maran and Araújo expands the analysis of accounting practices to the context of religious institutions, namely a Portuguese monastery in the eighteenth century. The origins of this female Benedictine monastery are underpinned by the interests of the local nobility to shield their family wealth from dispersion, once the principle of primogeniture was applied, and ensure the spread of their influence and privileges through the administration of the monastery. The argument of the article contrasts agency theory with the participatory governance of the Benedictine Rule. The authors develop the concepts of ‘displacement’ and ‘restraint’ for this purpose. ‘Displacement’ refers to the status of the monastery as a controllable entity by the Church, mainly through oversight practices of external auditors to verify the economic viability of this entity. ‘Displacement’ is also used in relation to the status of the individuals within the monastery, and the fact that they oversee the ‘displaced’ wealth of their family of origin and exercise their activity within specific deliberative bodies of the monastery. ‘Restraint’ refers to the areas of internal control, a delegation of administrative powers and allocation of assets and streams of costs or revenues. ‘Restraint’ qualifies both the detailed accounting rationalisation and the individual condition of the nuns. Nevertheless, the authors’ analysis reveals how these two concepts finally indicate the space of unparalleled freedom, which are offered to highly educated nuns within this privileged male-free community. This article emphasises the ability of accounting practices to shed light on the internal governance of the monastery by encompassing currency and in-kind transactions and by making visible, but subjected to internal social control, the extravagances of the nuns.

The last two articles in this issue are dedicated to the biographical genre and begin with the article from Duff about Distinguished Professor Lee Parker. The author details Professor Parker's past and present contribution to the accounting community. Duff's work is a recollection of both the personal and professional traits of Professor Parker, which make him an extremely successful scholar and mentor. Professor Parker's studies in Australia, motivation towards academia and early career in Scotland follow his own narration, while the reconstruction of his career after returning from Scotland to Australia draws from his family members’ viewpoints, the perspective of people who directly inspired and motivated him, his PhD students’ recollections, and interviews of his large network of colleagues and collaborators. The author sheds light on the intimate details of Professor Parker's long-standing editorship collaborations, including Accounting, Auditing & Accountability Journal's co-editorship. She then analyses his generous contributions to the academic leadership of multiple universities and especially his interest towards the growth of future generations. Important lessons can be learnt from his work-life balance, openness to taking risks, passion and curiosity for significant original and new knowledge, and personal organisation of his prolific creativity. Through Duff's article, a rich and rounded portrait of the man and the scholar emerges that explains his unique persona.

The last biography of this issue is a reprint of an article authored by Bob Parker (published in Aspects of Devon History, People, Places and Landscape) and is dedicated to the early career of George O. May, the only British-born accountant to be included in Stephen Zeff's paper on the ‘fourteen who made a difference’ in the first hundred years of the American profession. The article draws from the first two chapters of May's memoirs published posthumously in 1962 in New York and edited by his friend and Price Waterhouse partner. The author cleverly classifies and analyses a set of contingent pre-conditions to the success of May's career as an accountant in the US, namely class, gender, ethnicity, religion, education, choice of the right career, availability of a principal in a firm of chartered accountants, employment in the right firm after qualification, and luck to survive war, without having his career disrupted or terminated by injury or death. While May become a professional man with a worldwide reputation, the author reminds us how the opportunities that matured in the US for May had their roots in the favourable circumstances that he experienced in his region of origin – Devon in the UK.

We hope you enjoy reading this last issue for 2022 and we look forward to publishing more contributions in 2023.