The contribution of Grigore L. Trancu-Iasi to the evolution of accounting theory,practice and profession in Romania

Family background, education and institutional commitment

Trancu-Iasi was born on 23 October 1874 in Targu-Frumos, a Romanian city located in the district of Iași. Caus (2008) reports that he belonged to an old Moldovan family of Armenian origin. His father, Lazar Trancu, was a merchant while his mother, Ana, came from the famous Ciomac family of Botosani (Caus, 2008). After completing his primary school at the ‘Karacaș pension’, he continued his studies at the ‘Alexandru cel Bun’ gymnasium and later attended the commercial school in Iasi receiving a scholarship of 40 lei ³ per month (Tilibasa, 2021).

Then, he worked for several banks (Trancu-Rainer, 1982), first as a banking executive at the National Bank, in the branch of Iasi (1902), and then as a branch manager in Galati, Roman and Barlad. His sister reported that after the death of his father, Trancu-Iasi had to support the family, delaying his studies (Trancu-Rainer, 1982: 10).

He managed to obtain a degree in law from Alexandru Ioan Cuza University, although lagging behind his peers. At the end of his studies in law, he enrolled in a law firm in Judetul Covurlui. In parallel with his work as a lawyer, he became an author of the journal Corierul Judiciar, in which pages he published several studies and specialised articles (Anton, 1998). In 1913 – after obtaining a doctorate in Economics – he was appointed as professor at the Academy of High Commercial and Industrial Studies in Bucharest, where he held the chair until 1939 (see Appendix 1 available online).

Trancu-Iasi's academic career was promoted by Professor Constantin Petrescu (1858–1902), who played the role of his mentor (CECCAR, 2006). Petrescu wrote two main publications (Calu, 2005: 37) and, as reported by Ionascu (2015: 40), he remained anchored to the personalistic theory of the Italian Marchi and Cerboni. His contribution to the concept of azienda was limited, even though important. In fact, Petrescu defined himself as a partisan of the personalist theory (CECCAR, 2006: 28). Petrescu exerted a fundamental influence on Trancu-Iasi that would later characterise Trancu-Iasi's vision and specific contribution to the dissemination of Italian accounting doctrines.

For the purposes of a complete analysis of the figure of Trancu-Iasi, however, it must be emphasised that his academic role was concurrent with the political one. With the fall of the Romanian government in the autumn of 1916, the Romanian King took refuge in Iasi in November of the same year. That pushed Trancu-Iasi to be at the forefront of Romanian politics, although he had been a member of parliament since 1914 (Mironov, 2014). After serving in the National Liberal Party, Trancu-Iasi became a founding member of the Iasi Workers’ Party in 1917 and was the founder of the Ministry of Labour and Social Welfare, in which he served as a Minister in 1920 during the Averescu government. Also in the same year, he signed the law for the regulation of collective labour disputes, encountering many financial and non-financial difficulties (Trancu-Iasi, 2001: 21).

As Minister of Labour (Trancu-Iasi, 1922), Grigore Trancu-Iasi established important public offices and structures such as the Chamber of Labour for the Resolution of Disputes and hospitals and specialised dispensaries. Labour and social protection legislation linked not only to the protection of the working class (1920) but also to the creation of trade unions (1921), for which Romania became one of the first European countries with such institutions (Caus, 2008). Trancu-Iasi also encouraged the construction sector (law of 23 July 1921) and supported investments in the housing sector (law of 3 May 1927) (tax exemption for 10 years for those who would have made housing investments) and concessions on house purchases (see Curierul Judiciar, 1927).

Trancu-Iasi's political activity clearly shows that he was a truly eclectic person, proactively committed to better the legal, economic and social fields, besides being considered the ‘forerunner of the Romanian accounting thought’ (CECCAR, 2006: 31). His lectures at the Academy of High Commercial and Industrial Studies in Bucharest were said to be extremely interesting as they dealt with entirely original subjects: ‘Mihai Eminescu, economist’, ‘Librarul ca factor de cultură’ [Library as a fact of culture] and he also proposed commentaries of the great classical music composers such as Beethoven, Chopin, George Enescu, and Liszt, and of the Flemish poet E. Verhaeren (Caus, 2008).

Above all, Trancu-Iasi created connections and relations with other European countries through his participation in the Bureau International du Travail [International Labor Office] as a representative of Romania. He was the first to lay the groundwork for air law regulation. From 1928, the League of Nations in Geneva adopted and recommended to member states Trancu-Iasi's proposal to regulate and encourage the movement of goods and passengers by air. He also realised the importance of collaborating with foreign nations and attracting foreign investments (Trancu-Iasi, 1923). These principles – considered as opening up to the international economic world – were not only the expression of mere political logic but also the reflection of Trancu-Iasi's scientific studies and publications, focused on foreign doctrines to improve the economic and commercial condition of his country. Grigore Trancu-Iasi died on 7 January 1940, in Bucharest.

The works and the contribution to the development of accounting education

Trancu-Iasi influenced the evolution and improvement of accounting education in several ways. This stems from the fact that his personal commitment has been heterogeneous and linked to legal, economic, financial and social aspects. His experience helped him to define best practices in different aspects of accounting. These practices had a common denominator: the need to disseminate best practices in the field of accountancy, helping the graduates of commercial schools to become recognised accountants at the national level.

Grigore Trancu-Iasi was a scholar who achieved early full scientific maturity and championed a renewal action in accounting in the first four decades of the twentieth century (Hlaciuc and Petris, 2010: 243). He published valuable accounting works in the same period (Table 1).

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Table 1.

Trancu-Iasi's main publications on accounting, business and financial topics.

Year	Title of publication	Translation
1899	Societăți cooperative	Cooperative firms
1900	Cursul schimbului și dobânda	Exchange rate and interest
1901	Rolul registrelor comerciale în faliment	The role of commercial registries in bankruptcy
1905	În chestia moratorului	In the matter of the moratorium
1905	Administrațiunea societăților anonime	Administration of limited companies
1906	Galații și tarifele de transport	Galaţi and freight rates
1911	Absolvenții școalelor comerciale și comercianții noștri	Commercial schools’ graduates and our merchants
1912	Concepția juridică a bancrutei	The legal concept of bankruptcy
1912	Responsabilitatea administratorilor în societățile anonime	Liability of directors in limited companies
1912	Câteva articole în chestiunea meseriașilor și muncitorilor	Some articles on the issue of craftsmen and workers
1913	Depozite spre fructificare	Interest-bearing deposits
1914	Curs de comerț și contabilitate, pentru școale comerciale superioare	Course of commerce and accounting, for high schools of commerce
1914	Muncitori și Meseriași	Workers and Craftsmen
1916	Raportul bugetului Ministerului de Finanțe	Budget report of the Ministry of Finance
1921	Drept comercial, opțiuni și controverse. Registre, Vânzări, Societăți, Cambii, Falimente, etc.	Commercial law, options and controversies. Registers, Sales, Companies, Foreign Exchange, Bankruptcies, etc.
1923	Colaborarea capitalului străin	Collaboration of foreign capital
1924	Organizarea Internațională a muncii	International Labor Organization
1926	Le comerce interieur et exterieur de la Roumanie (with George Stroe)	Romania's domestic and foreign trade (with George Stroe)
1927	Noi orientări economice	New economic guidelines
1930	Aspecte economice	Economic aspects
1930	Contabilitatea meseriașului	Craftsman's accounting
1933	Eminescu Economist	Eminescu Economist
1933	Curs de Corespondență Comercială Română	Course of Romanian Commercial Correspondence
1933	Meseriașul în fața marei industrii	The craftsman compared to the big industry
1934	Corespondența comercială din punct de vedere al vânzărei	Commercial correspondence in terms of sales
1935	Corespondența Comercială Română, Partea I, II, III. (1931–1935)	Romanian Commercial Correspondence, Part I, II, III. (1931–1935)
1935	Școala Contribuabililor	School of Taxpayers
1936	Réalisation roumaines dans le domaine du droit ouvrier (conférence tenue à l’Université de Poznan Pologne)	Romanian realization in the field of labor law (lecture held at the University of Poznan Poland)

The assessment of his fundamental contribution to the development of accounting education cannot be limited to his ability to interpret new trends in the field but must be contextualised in the broader range of interventions related to his academic, institutional and political activities. In this regard, this analysis considers his commitment towards the graduates of the commercial schools, as well as his promotional activity of a professional corpus of accountants in the professional and political context of the time. That was pursued through his participation in associations, clubs, congresses, publication of books and articles and direct political intervention and lobbying.

Regarding the first aspect, Trancu-Iasi's commitment is clearly identifiable in his work entitled Absolventii Scoalelor Comerciale si Comercianti Nostri (1911) (Graduates of the Schools of Commerce and our Merchants [Authors’ translation]), in which he expressed his concern for the future of the graduates of the commercial schools. He widely collaborated with the Revista Generala de Comert si Contabilitate (General Review of Commerce and Accounting [Authors’ translation]) which was coordinated by the Union of Graduates of the Commercial Schools (Botez, 2021). Furthermore, in 1919 he supported with other colleagues the ‘Circle of Commercial Studies’ that was inaugurated by the Graduates of the Schools of Commerce (Draganescu, 1919: 202).

As reported by Botez (2021: 694), Trancu-Iasi's signature appears in a memorandum dated 1901 and addressed to the President of the Bucharest Chamber of Commerce to regulate the accounting profession in Romania. It was during his Ministry that Grigore Trancu-Iasi's role is considered pivotal for the creation of a National Corpus of Accountants.

In July 1920, the plan for the creation of such corpus was pursued by Trancu-Iasi, who was the Minister of Labour at that time. The plan was accompanied by the request to be approved on behalf of his Ministry (CECCAR, 2006). He immediately set up an evaluation commission, whose members were P. Draganescu, V.M. Ioachim ⁴ and S.M. Blumenfeld under the chairmanship of Gusti. The initiative became a parliamentary matter and, in 1921, it received favourable votes. Trancu-Iasi, therefore, is still today remembered as ‘cel fără de care apariţia legii ar fi fost aproape imposibilă’ (CECCAR, 2011): ‘the man without whom the release of this law would have been impossible’ [Authors’ translation].

The 1921 statute of the National Corpus of Accountants was almost entirely based on the model originally proposed by the Union of Graduates in 1908. In light of the historical, economic and social considerations made before, the analysis of the statutory regulations ⁵ (Anuarul General al Contabililor din Romania, 1921) clearly highlights two objectives.

The first objective is economic, and it would be achieved thanks to the professionalisation of accountants through the education system. That should be inspired by the best practices in accounting, which would improve the public–private relationship of trust as well as the economic efficiency of such a relationship for the country.

The second objective is both economic and socially inspired as it concerns the establishment of links between the commercial and industrial world (at that time in the hands of foreigners) and the accounting profession. This objective was aimed at introducing the figures of Romanian accountants and facilitating the development of new Romanian entrepreneurial initiatives.

Trancu-Iasi's contribution was acknowledged in a telegram sent by Butculescu (First President and Dean of the Corpus) to Trancu-Iasi (CECCAR, 2006).

The recognition for the work of Trancu-Iasi came from his election and re-election as Honorary President of the Superior Council of the Corpus of Chartered Accountants and Accounting Experts in the following periods: 1921–1923 / 1923–1925 / 1925–1927 / 1927–1929 / 1929–1931 / 1931–1933. At the First Congress of the Accountancy Profession held in Bucharest in 1923, Trancu-Iasi had the opportunity to say:

When I see each one of you, I remember an unceasing series of concerns and needs that we have experienced to establish the wealth of this country, to give splendor to the institutions. […] The day of light and triumph has come! This day represents the step forward that we have taken [to the professionalisation of accountants] and that we celebrate. But it is still the first step because we still have needs to finalise and things to achieve! (CECCAR, 2006: 82)

These aspects give a comprehensive understanding of Trancu-Iasi's academic commitment, which materialised through the publication of scientific texts, the teaching activity in commercial schools and the establishment of a network of academic relationships.

Regarding his interaction with other colleagues, his chair at the Academy of High Commercial and Industrial Studies in Bucharest is particularly relevant. As reported by Păiuşan (2010: 689), at the time in which Trancu-Iasi taught:

the Bucharest Academy of Commerce was organized in chairs and conferences, corresponding to the 20 disciplines of study. In six disciplines (Political Economy, Finance, Accounting, Money and Credit, Economic Geography, and Chemical Technology) there was a chair and a conference, whereas the remaining disciplines had only a chair. Most of the chairs involved only one full professor, but some of them had two full professors at the same time. For instance, …in the accounting discipline, Grigore Trancu-Iaşi and Spiridon Iacobescu.

Professor Spiridon Iacobescu was recognised as a later authoritative supporter of the asset-centred doctrine. Obviously, this is not the only evidence of the interaction of Trancu-Iasi with other Romanian scholars. However, it is true that an extraordinary asset-centred accounting vision was established in Bucharest.

Other sources state that the collaboration between Trancu-Iasi and Spiridon Iacobescu is related to their common effort to establish a professional corpus of accountants. This is crucial because, in a context with a heterogeneous approach to accountancy, the creation of an accountant's corpus passed through a social closure and internal struggles with factions of the elitist group (Zelinschi, 2009). The need to spread an updated accounting education was the focus of Trancu-Iasi in order to facilitate social and economic progress (Trancu-Iasi, 1911).

Table 1 illustrates that the main works published by Trancu-Iasi were in the field of accounting and commerce and aimed to contribute to the development of a doctrine on the management of commercial and handcrafted businesses. This fully reflects GrigoreTrancu-Iasi's keen interest in business activities which were not widespread in the Romanian economic context (Butculescu, 1908a, 1908b; Voiculescu, 1908) and still suffered from a lack of bookkeeping.

The works entitled Absolvenții școalelor comerciale și comercianții noștri (Commercial Schools’ Graduates and our Merchants [Authors’ translation]) (1911) and Curs de comerț și contabilitate, pentru școale comerciale superioare (Course of Commerce and Accounting for High Schools of Commerce [Authors’ translation]) (1914) (Figure 2), in particular, confirm that these doctrines were primarily addressed to students at the schools of commerce, who (following a social perspective of which Trancu-Iasi was the promoter) were to be the spokespeople of the most developed and up-to-date international accounting doctrines.

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Figure 2.

Title page of the Course of Commerce and Accounting – third edition.

Trancu-Iasi and the knowledge transfer from Italian schools of accounting thought

To understand the reasons Trancu-Iasi focused on Italian accounting specialised issues, it is important to underline the role of the Italian language in Romania, the influence exerted by Italians in the commercial field as well as the Italian schools of accounting thought. The Italian language was particularly important for the purposes of both primary and higher school education. The first reason is found in the massive presence of Italian teachers in Romania (Frollo, 1871). Several sources indicate that between the nineteenth and the twentieth century, the Italian language and its usage in the commerce field were mandatory in the Romanian schools of commerce (Frollo, 1871; Ministero degli Affari Esteri, 1907). The fundamental proof is provided by F. Rovenna in the General Review of Commerce and Accounting of 1915. He recalls that on 18 November 1914 at the Academy of High Commercial Studies in Bucharest an opening lesson was held on N. Serban's Manual of Italian Commercial Correspondence for use by Romanians (Rovenna, 1915).

This aspect was the consequence of the involvement of several Italians in the trade with Romania, which was substantial at the time. Some harbour cities along the Danube River were considered Italian commercial colonies. In other cities, the range of Italians’ commercial activities was also broad (Tagliavi, 1940). We argue these aspects played a pivotal role in creating a close connection between Italian and Romanian culture. Even more important was the evolutionary process that characterised the European accounting doctrines between the nineteenth and the twentieth century, especially in Italy.

In the early years of the nineteenth century, the accounting concepts of Degranges Senior (1868), Jones (1796) and Meisner (1803) were the most established internationally. The penetration in Italy of these foreign accounting paradigms caused, by reaction, the upswing of Italian accounting studies. The latter had suffered a long period of stasis since the second half of the seventeenth century (Gambino, 2006: 13). In the second half of the nineteenth century, Italian accounting studies had a strong acceleration: the number of printed works increased considerably and the interest of scholars progressively extended from the narrow and formal field of accounting rules to the doctrinal aspects of accounting (Gambino, 2006: 18). There was a cultural turmoil in Italy, consisting in the transformation of the accounting techniques in a scientific discipline (Canziani, 2007). The research activity switched the focus from double-entry bookkeeping to the theories of the accounts, including the recording in debit or credit, as well as the administration of the azienda (Coronella, 2014: 240). These progresses involved the affirmation of multiple schools of thought in addition to the original Lombard School of Villa and Tonzig, such as the Tuscan School led by Cerboni (Marchi was a precursor) and the Venetian School led by Besta (Coronella, 2014: 240).

At the end of the nineteenth century, a series of works about accountancy, such as those of Honoriu Warta (1873), Ion Ionescu de la Brad (1870), Dimitrie Iarcu (1863, 1870), Theodor Stefanescu (1873) existed in Romania (Stănciulescu 2021: 5; Tudor and Mutiu, 2007: 187). However, the spread of corruption, fraud and bankruptcy in the commercial and professional world (Ioachim, 1908; Rasidescu, 1908a; Trancu-Iasi, 1911; Voiculescu, 1908) together with a conflicting vision within the academic system (Zelinschi, 2009) did not allow the adoption of a unitary and advanced theoretical accounting model.

In such a context, the linguistic and cultural proximity with Italian and international commercial and accounting culture became an important means of dissemination of international doctrines. The knowledge transfer was further nurtured through scientific reviews and academic or work trips abroad at the beginning of the twentieth century (Academia de Inalte Studii Comerciale si Industriale din Bucuresti, 1933). A 1912 publication in the Revista Generala de Comert si Contabilitate (General Review of Commerce and Accounting [Authors’ translation]) deals with the literature review of some important Italian journals such as Rivista dei Ragionieri, Monitore dei Ragionieri and Rivista Italiana di Ragioneria (Journal of Accountants; The Monitor of Accountants; Italian Journal of Accounting [Authors' translation]) and their technical content (Negrescu, 1912). Another example is provided by the Academia de Inalte Studii Comerciale si Industriale din Bucuresti (Academy of High Commercial and Industrial Studies in Bucharest [Authors’ translation]) (1933) which mentions the school trip of commercial classes to Italy to deepen the Italian accounting theories.

Petrescu himself, the mentor of Trancu-Iasi, benefited from these cultural connections between Italy and Romania. In 1874, Petrescu was in Italy and worked as a scholar of Giuseppe Cerboni (Ionascu, 2015). He was able to share in Romania what he learned about accounting doctrines and above all about logismography (Petrescu, 1901a) thanks to this experience in Italy. Moreover, Petrescu enlightened Trancu-Iasi by sharing what he learned on the subject of the Italian azienda (Petrescu, 1901a).

As reported by CECCAR (2006: 26) about Petrescu:

A source of ideas is represented especially by Italian schools. … The notion of azienda comes from them (azienda, in Italian, means administration of the business and its public or private assets, with all the complex functions of the organization and coordination of people), as well as the personalistic theory of accounts, and the two basic groups of accounts: the accounts of the owner and the accounts of the company (or of the agents and the representatives of the company).

Five meanings for the word ‘accounting’ emerge in Constantin Petrescu's analyses:

the place or office set aside to keep the accounts;

According to Petrescu, the foundation of the double-entry bookkeeping method lies in the equality of the juridical–economic relationships between the owner and his azienda (his agents and representatives). The relationships established between the owner and the azienda produce positive or negative effects. These effects are opposite and equal.

The accounting methods followed by Petrescu are certainly illuminating, in the context of a theoretical and practical accounting oblivion, which was widespread at the time in Romania. Unfortunately, Petrescu's thoughts fail to define clear horizons of application.

However, the contribution that Constantin Petrescu was able to give to the education of scholars, including Grigore Trancu-Iasi, remains clear. His best student Trancu-Iasi, considered by CECCAR (2006: 31) as the ‘precursor al gândirii contabile românesti’ (‘precursor of the Romanian accounting thought’ [Authors’ translation from Romanian]) dedicated himself to the spread of accounting doctrines. He focused on the theories of the accounts, deepened the analysis of the azienda and extensively devoted himself to other accounting aspects, such as bookkeeping in cases of bankruptcy (Trancu-Iasi, 1901, 1912, 1921).

Trancu-Iasi played a pivotal role in the accumulation and transfer of knowledge related to Italian doctrines, thus broadening the spectrum of investigation to the various Italian schools of thought's leaders. He was described as follows by the media of that time:

As a professor at the High School of Commerce, he is the author of the best accounting textbook.

Analogously, he was held in high regard by contemporary scholars: ‘During his academic activity of more than 25 years (1913–1939), Grigore Trancu-Iasi contributed to the development of Romanian economic education’ (Botez, 2021: 698).

Trancu-Iasi used a large number of bibliographical citations of Italian scholars concerning concepts and doctrines in the field of accounting (Table 2), which demonstrates his appreciation for their developments. By way of example, from the preface to the first edition of his Course of Commerce and Accounting of 1914, Trancu-Iasi states how accounting doctrine has developed over time as a result of the need to monitor and control the evolution of aziende during their economic life. In illustrating the history of these general evolutions, Trancu-Iasi referred to their more extensive analysis by Giovanni Massa in volume 12 of his Trattato Completo di Ragioneria (Complete Treatise of Accounting [Authors’ translation]) of 1912. In particular, Trancu-Iasi emphasises how much the Italian personalistic doctrines opposed the French one (Trancu-Iasi, 1921). In this regard, Trancu-Iasi started admiring the opposition of Francesco Marchi da Pescia who, thanks to his work I Cinquecontisti (1867), made possible the triumph of the Italian doctrine (Trancu-Iasi, 1921).

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Table 2.

Italian authors and doctrines ⁷ analysed by Trancu-Iasi in Curs de comert si contabilitate pentru scoale comerciale superioare [Course of Commerce and Accounting for the High Commercial Schools] (1914).

Year	Italian authors	Titles	Doctrines
1867	Marchi F	I Cinquecontisti	tecnica contabile
1878	Cerboni G	Cenni sulla scrittura a partita doppia (metodo logismografico)	logismografia e ragioneria
1878	Rossi G	Delle attinenze logismografiche	logismografia
1882	Sanguinetti A	La logismografia	logismografia
1886	Pisani E	La statmografia	logismografia
1888	Chiesa C	La logismografia	logismografia
1892	Morelli E	La logismografia	logismografia
1899	Nicolli V	Cooperative rurali	tecnica contabile e diritto commerciale
1908	De Gregorio A	I bilanci delle società anonime	ragioneria
1908	Sperotti E	La computisteria	computisteria
1909	Besta F	La ragioneria	ragioneria
1910	Castelli	La riforma del Giornale Mastro	ragioneria
1911	Serafini S	Le bureau commerciale	computisteria, tecnica commerciale e tecnica bancaria
1911	Villa E	Trattato di computisteria e ragioneria	computisteria e ragioneria
1912	Massa G	Ragioneria, Vol. 1–12	Ragioneria
1913	Salandra V	La riserva matematica delle imprese di assicurazione sulla vita	matematica finanza e attuariale

The many Italian doctrines, as well as the various spokespeople who spread and advocated their values, draw attention to specific perspectives and facets that they may entail. As an additional example, Trancu-Iasi explains in a significant way the statmography method, through which he outlines the function of the balance sheet:

A new accounting method was invented by Emanuele Pisani da Modica, former professor at the High School of Commerce of Bari (Italy) … This method is based on materialist theory. The author starts from the principle that every administrative operation, considered by itself, affects the state and circulation of the assets …. This is why Pisani divides operations or managerial events into three main categories: static, dynamic, and static-dynamic. (Trancu-Iasi, 1921: 6)

Trancu-Iasi further emphasises the important influence of Italian doctrines by using the concept of azienda and its functioning. These were at the centre of academic clashes in Italy that would have eventually defined the new horizons of the economia aziendale theory in Italy.

The need for accounting correctness and the appraisal of double-entry bookkeeping doctrine

Trancu-Iasi felt the need to pursue best practices in accounting, which is explained in several works (1911, 1912, 1921) but above all it is highlighted through several points of his handbook, originally published in 1914.

More specifically, it is possible to see Trancu-Iasi's comments on the role of accounting: ‘to obtain final evaluations; for forecasting purposes; as an instrument for regulating economic relations’ (Trancu-Iasi, 1921: 253).

Accounting is here considered as the ‘history’ of the firm and, therefore, a real statement of the facts and transactions that concern it.

Assuming that accounting is the history of the firm, it is understood that whoever is responsible for exhibiting it will follow the rules that allhistorians follow in the elaboration of their work, that is, they will make an exact analysis of the facts and record them in a certain order, taking care that everything is linked to a supporting document. The accounting organised in this way will be the story of our firm, the story that will tell our triumph if the firm thrives, or our disasters if the firm stagnates or loses. (Trancu-Iasi, 1921: 253)

He also describes the fundamental forward-looking view that can be obtained from regular accounts so as to have a clear idea of whether the firm or initiative is likely to succeed or fail.

If the advantage is foreseeable, the entrepreneur let his ships carry products to new seas and new countries. If on the contrary, the advantage is not foreseeable, the entrepreneur refrains from the business. Where else, besides accounting, can we find the necessary elements for a better direction? (Trancu-Iasi, 1921: 254)

In addition, Trancu-Iasi remembers a principle of regularity for economic and social purposes. Keeping the correct number of accounting books and keeping them according to the specific principles laid down in the legislation was now a conditio sine qua non for carrying on business, legally.

Thanks to the accounting books, it would have been possible to maintain relations with third parties, in the context of a transparent commercial business. Therefore:

Commercial law requires compliance with its own provisions regarding commercial accounting books. Anyone who does not keep them in order risks the loss of such evidence in court, concerning the commercial life of the business and is exposed to the penalty of bankruptcy (Art. 876–882 of the Com. Code). Furthermore, for tax purposes, different laws refer to the accounting books. (Trancu-Iasi, 1921: 254)

It must be stressed that, at the time of Trancu-Iasi, the legislation stipulated rules both for compulsory accounting books (registre obligatorii) and for optional accounting books (registre facultative).

According to the Commercial Code, every business engaged in commercial or industrial activities, regardless of its legal form, was obliged to keep the following records:

- jurnal (journal book). According to art. 22 of the Commercial Code, this accounting book is intended to record everyday transactions or collection of payment, that is, commercial transactions, agreements and transfers of commercial instruments.

Considering this classification, Trancu-Iasi stresses that the main accounting books were the journal book, the ledger, the inventory and the copybook. However, only the journal, the inventory and the copybook were mandatory as the obligation to keep them was imposed by Art. 22 of the Commercial Code.

Although essential for accounting correctness, the ledger was not considered a compulsory accounting book. This detail confirms the precarious state of the accounting practices at the time, as outlined in the former sections of this article. This situation required new accounting principles and the establishment of a more professional accounting class, able to recognise the relevance of these details (Ioachim, 1908; Rasidescu, 1908a).

Trancu-Iasi's analysis concerning accounting books shows two distinctly crucial elements to understand the need for a new regulation of the accounting system:

certain essential accounting books, such as the ledger, were not compulsory; and

These issues confirm that the class of accountants in Romania at the beginning of the 1900s was not aimed at pursuing the ideals of transparent reporting but was rather aimed at protecting the exclusive interests of their clients (Boltus, 1908; Rasidescu, 1908a) by omitting certain records/books – or even deliberately concealing them. This was possible thanks to inappropriate legislation (Ioachim, 1908), which was far from pursuing accounting best practices throughout Romania.

In the attempt to clarify the actual function of accounting – and still wishing to provide a complete analysis of the extant accounting methods – Trancu-Iasi draws attention to single-entry bookkeeping, mixed bookkeeping and double-entry bookkeeping. Regarding the single-entry accounting method, he states that it was often used in practice before the spread of double-entry accounting. However, a considerable number of people still use the simple-entry method (Trancu-Iasi, 1921: 297).

With regard to mixed bookkeeping, he argues that ‘when some accounts of the collaborators of the azienda are taken into consideration besides personal accounts, accounting is no longer simple, but it is called mixed’ (Trancu-Iasi, 1921: 301). However, it is through the analysis of the double-entry accounting method that important aspects can be identified. Thus, double-entry bookkeeping is first explained in its fundamental rules, as a constant recording of transactions through the reports of

‘Debit (sa dea) = Credit (sa ia)’ ⁶

Furthermore, the functioning of this method is described with reference to many accounts. In this regard, particularly interesting is the description of the ‘cassa’ (‘cash’ [Authors’ translation]) account functioning (which is clearly borrowed from the Italian language) as a prominent element (Figure 3).

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Figure 3.

Description of ‘cassa’ account functioning. ⁸

The word cassa (cash) is not the only technical term adopted from the Italian language. A further example is the functioning of ‘storno’ (‘reversal operation’ [Authors’ translation]), which is introduced as follows:

[In a hypothetical situation] there is a recording error in a journal article for the sum of Lei 100. That amount is recorded to the cassa [cash] account instead of being recorded in the goods account … If the mistake is made only in general ledger, the storno [reversal operation] will be made only through that accounting book without making another journal article. (Trancu-Iasi, 1921: 382)

Due to the scope of this article, a full description of the whole double-entry bookkeeping technique provided by Trancu-Iasi cannot be provided (see Appendix 2 available online). However, it should be underlined how the author placed his trust in the correct functioning of double-entry bookkeeping for the achievement of ordered and operational efficiency in the business and the economy. His mentor, Petrescu, introduced the subdivision of accounting in empirical and scientific methods (Petrescu, 1901a, 1901b: 147); however, having been a student of Cerboni himself, he was unable to fully detach from the ideas he was exposed to, and he leaned towards a personalistic view of accounting (Ionascu, 2015: 40). Instead, Trancu-Iasi recognised the double-entry bookkeeping as the best method (Trancu-Iasi, 1921: 301), and this was an added value to the Romanian accounting tradition.

The studies on the concept of ‘Azienda’

Trancu-Iasi's understanding of the firm's functioning was of an organised system for managing assets and business transactions. The concept of ‘affare’ (‘business matter’) was too vague to define an efficient and organised system. Thus, Trancu-Iasi complies with the studies of his mentor, Professor Constantin Petrescu, who introduces the Italian term ‘azienda’ in his book entitled Contabilitatea si Administratia (1901). Azienda was considered as: ‘The administration of firms and public or private assets with all their complex functions, and the independent personification of the property with respect to the owner of the azienda’ (Trancu-Iasi, 1921: 255) [Authors’ translation].

Trancu-Iasi provided a most updated description of azienda, in accordance with Besta (1909), stating that: the entirety of phenomena, exchanges and administrative relationships concerning the accumulation of assets – which form an independent set of properties, belonging to a single person, a family or any union – is called azienda (Trancu-Iasi, 1921: 257) [Authors’ translation]. In such a context, the term ‘averea sau bogatia’ (from Italian ‘avere’ or ‘credit’ in English), belonging to an azienda, takes the name of ‘patrimonial’ (in Italian ‘patrimonio’ or ‘net assets’ in English).

Aziende are then classified drawing inspiration from the two main groups (‘imprese’ or ‘firms/businesses’ and ‘tutte le alter aziende’ or ‘all the other’) described by Besta. Following his conceptual framework: ‘We will report in accordance to Professor Besta from Venice, the theory of economic administration of businesses’ (Trancu-Iasi, 1921: 255) [Authors’ translation).

Trancu-Iasi includes in the first group of (actual) aziende those entities whose net assets are used for a specific purpose in agriculture, commerce, banking or manufacturing. On the other hand, the second group includes (other) aziende for which the net assets are intended to satisfy the needs of certain people, a family or a community, such as charities (Table 3). Like Besta's careful analysis, Trancu-Iasi is interested in the correct representation of what occurred and is occurring in the real life of the azienda (D’Amico and Palumbo, 2012: 3). Furthermore, from the specific consideration of the ‘administration’ of the azienda, in an innovative accounting context (Galassi and Mattessich, 2004), it emerges that Besta conceives the azienda as an entity composed by: ‘… a first part, the management …; a second one, the direction …; and a third one, the control …’ (Besta, 1880: 15) [Authors’ translation] In this regard, Trancu-Iasi (1921: 260) underlines that ‘bogatia’ (‘avere’ or credit) is represented under different aspects on the basis of the azienda typologies and, therefore, it is a necessary means to manage/control them.

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Table 3.

Classification of aziende according to Italian doctrine.

1. According to the purpose	Net assets as an aim (Enterprise)	Commercial Industrial Banking Agricultural
	Net assets as a means (Administration)	Domestic Company
2. According to the subject having the right	Public	Company Community
		Foundations Institutions
	Private	Individual Collective	- Civil - Commercial
3. According to the administrative board	Independent	It is related to the composition of pro-active boards. When the administration function resides in a single person who defines the direction and domain of the azienda, in totally independence, then the azienda is considered independent/autonomous. When, on the other hand, authority and managerial intelligence reside in different persons or subjects, then the function of the administrator depends on the prescriptions of those who exercise such authority. Generally, private aziende are independent, while public ones are dependent.
	Dependent
4. According to the executive board	Simple	The classification relates to the extent and distribution of the administrative function. Azienda is ‘simple’ when the administration is conducted by a single individual: the administrator.‘Complex’ is defined the administration of an azienda divided among many subjects.When administration is performed by a single group of agents under the supervision and direction of the administrator, azienda is ‘undivided’. If, on the other hand, azienda carries out a large number of businesses, that it cannot have their immediate direction, then it is defined as ‘divided’.
	Complex
	Undivided
	Divided

Source: Trancu-Iasi (1921: 262).

The analysis of Cerboni's logismographic method and Besta's asset-centred accounting system

Trancu-Iasi carefully deepens Cerboni's concept of logismography and devotesan important part in the third chapter of his Course of Commerce and Accounting (1921) to this technique.

Although referring to its creator, the Italian Giuseppe Cerboni, Trancu-Iasi shows particular attention to the works of later scholars such as Morelli, Chiesa, Rossi and Riva. More specifically, he deepens the logismographic method and its application to the branch of commerce. In the first analysis, Trancu-Iasi outlines the method, describing its parts: ‘Description of the logismographic method (Figure 4). The necessary records in logismographic accounting are: 1. Journal, 2. Executions, 3. Accounting framework and 4. Detail of the accounts’ (Trancu-Iasi, 1921: 539). This fully follows the four tools highlighted by Cerboni (1878b: 6).

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Figure 4.

Logismographic tools. ⁹

As an expression of a personalistic method, the logismographic method identifies the functions of the azienda through the identification of people and their reciprocal accounting relationships. Trancu-Iasi recognised that in the logismographic method of Cerboni (1878a): ‘In any azienda, whether small or large, the people involved in management can be classified into four categories, namely: 1) the owners, 2) the administrators, 3) the agents and 4) the representatives’ (Trancu-Iasi, 1921: 529) [Authors’ translation].

By describing the figures quoted above, the author draws attention to the dense network of relationships existing between the owner, namely the driving force of the firm, those who take responsibility for decisions under a mandate, those who take physical care of the firm's assets and finally those who enter into a credit or debit relationship with the firm. Consequently, the debt of one person is always recorded as the same but opposite credit of another (Trancu-Iasi, 1921: 530).

From this point of view, the relationship between the owner, the agents and the representatives can be better defined as follows (Trancu-Iasi, 1921: 530) [Authors’ translation].

‘1. the owner's credit = debt of agents and representatives;

A correct logismographic method would have always had to take these two relationships into account and record the debt and credit reciprocal relationships.

Starting from this, Trancu-Iasi shows how the logismographic balance (Coronella, 2014: 250) depends in summary on the equality shown above. Due to the scope of the present work, for a more complete description of the accounts according to the logismographic principle reported by Trancu-Iasi, see Appendix 3 available online.

As an interpreter of the new trends in Italian accounting doctrines, Trancu-Iasi goes beyond the simple demonstration of the technique. He also deepens the observations and debates that have arisen through the various Italian schools of thought:

Cerboni's logismography, which found warm defenders in Achille Sanguinetti and Giovanni Rossi, is dealt with in part three of this course. The debate on these theories has brought to light the theory of the value accounts by Professor Fabio Besta of Venice, that we have considered among the theories on the administration of the azienda in the second part of the course. (Trancu-Iasi, 1921: 6)

Then, he considers the specific observations of Besta:

Besta in La Ragioneria, volume three, examines logismography with respect to other recording methods, its qualities, and limitations. Here are the points examined by Besta, whose value is absolutely necessary for those who want to deepen accounting problems:

Drawing on Besta's insights, Trancu-Iasi highlights the various doctrinal positions, trying to follow as closely as possible the developments that characterised the evolution of accounting doctrine in Italy.

As analysed in Sargiacomo et al. (2012: 255), contrary to Cerboni, Besta's accounting system was asset-centred and was mainly aimed at detecting all changes (either positive or negative) in the assets elements of the azienda, considered as elements of wealth. The accounting theory was then mainly focused on azienda's assets and their variations. In this regard, the interest demonstrated by Trancu-Iasi in the Besta position concerns specifically the azienda's assets:

For whatever reason the changes produced in the quantity, form and value of the assets occur, they must be noted, because only in this way the situation of the assets can be represented, and only in this way we can know whether the administration satisfies or does not satisfy the conditions of harmony shown in its definition. Any changes in the elements of the assets or in their value must be recorded in the accounts and valued in currency in the related account. Any events caused by different situations, as indicated above, that impact on the assets must be represented. (Trancu-Iasi, 1921: 264)

Following the Venetian School, Trancu-Iasi underlines how the accounting records derive from transactions and their ‘values’ impact on the azienda assets. To explain this statement, Trancu-Iasi also defines the concepts of ‘permutative facts’ and ‘amending facts’:

I. Permutative facts. - When the accounting fact, of any nature, economic, administrative, legal, etc., produces in the assets only a variation of the constituent elements, without the assets’ value increasing or decreasing, then there is a permutative fact. For example: we have an effect of 1000 lei at maturity, which we collect. Our assets have not changed if, instead of the portfolio effect, we have liquidity.

These commentaries and arguments of Trancu-Iasi demonstrate how enlightened and proactive he was to advance accounting techniques in a doctrinal context always in evolution.

Susequentworks of colleagues of Trancu-Iasi at the Academy of High Commercial and Industrial Studies in Bucharest demonstrate his influence (Table 4): they continued to deepen Besta's asset-centred vision analysed by Trancu-Iasi in 1914. Further important initiatives emerged in the years after the publication of Trancu-Iasi's Course of Commerce and Accounting. Noteworthy is the ‘Scoala patrimonialista’ (School based on asset-centred vision) established at the Academy of High Commercial and Industrial Studies of Bucharest.

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Table 4.

Connections framework in the knowledge transfer process.

Scholar	Name and year of the publication	Relationship with Trancu-Iasi
Spiridon Iacobescu	Contabilitate comerciala generala in legatura cu dreptul si legile speciale ale comertului – Vol. 2(1928)	Professor at the Academy of High Commercial and Industrial Studies in Bucharest together with Trancu-Iasi. Partner of Trancu-Iasi for the creation of a national class of accountants and Member of the Council of the National Corpus of Accountants (Botez, 2021).
Petru Draganescu-Brates	Contabilitatea Suplimentul Aritmetic al Ştiinţei Economiei Intreprinderilor(1941)	He collaborated with Trancu-Iasi at the Revista Generala de Comert si Contabilitate (Botez, 2021) and was associated with the ‘Circle of the Commercial Studies’ together with Trancu-Iasi (Draganescu, 1919). With V.M. Ioachim, he prepared a draft, for the organization of the National Corpus of Accountants, that was presented directly to Minister Trancu-Iasi.
Vasile M. Ioachim	Tratat de Contabilitate cu aplicaţie la industrie. Contabilitate generală(1944)	Associated to the ‘Circle of the Commercial Studies’ (Draganescu, 1919). Together with P. Draganescu, he prepared a draft, for the organization of the National Corpus of Accountants, that was presented directly to Minister Trancu-Iasi. Ioachim was also the first Director of the National Corpus of Accountants when Trancu-Iasi was Honorary President (Botez, 2021).
Stefan I. Dumitrescu	Elemente şi principii de ştiinţă contabilă(1947)	Professor at the Academy of High Commercial and Industrial Studies in Bucharest (Hlaciuc and Petris, 2010) where Trancu-Iasi taught.

The accounting system with an ‘asset-juridical approach’ was promoted by Spiridon Iacobescu (Table 5). Together with Alexandru Sorescu, S. Iacobescu recognised the importance of the asset-centred theory in their book entitled Contabilitate comerciala generala in legatura cu dreptul si legile speciale ale comertului (1928) (General commercial accounting in connection with the law and the special commercial regulations [Authors’ translation]).

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Table 5.

Asset-legal approach conceived by Iacobescu-Sorescu (1928).

Assets – legal approach
Assets Values accounts
Debtors accounts
Losses Accounts
Memorandum accounts (Debit balances)

Source: Adaptation from Calu et al. (2004).

The assets concept is used in the definition given to the balance sheet as the definitive representation, in accounting form, of the activities and liabilities of the azienda, together with the results that modified the initial form of the net assets or wealth (Calu et al., 2004; Iacobescu and Sorescu, 1928). The prevailing view was thus articulated on the so-called ‘asset values accounts’ that in Besta's vision expressed the single elements – active and passive – that constituted it.

It seems that the principle of value accounts is privileged over the previous view of the personalisation of accounts typical of Cerboni's works.

Following the Venetian School, this perspective was based on the assumed ‘scientific character’ of the accounting (Iacobescu, 1942: 13). The accounting system with an asset-centred vision was also promoted by other successive scholars that had a close interaction with Grigore Trancu-Iasi.

Given the specific contribution, Demetrescu (1972: 286) considered the fundamental impact provided by the ‘Scoala patrimonialista’ as an expression of Romanian accounting thinking.

As reported by Hlaciuc and Petris (2010: 250), the first Director of the National Corpus of Accountants, Vasile M. Ioachim, considered accounting as the science that deals with the rules, then seeks systematically by using numbers the changes of assets (as a whole and in their constituent elements), to have the net assets’ status of the azienda at any time, and the representation of the causes and effects of changes. In the same way, Stefan I. Dumitrescu continued to consider accounting as a science aimed at building a system for managing wealth. Accounting, thus, is not a computing tool but the science of wealth management, called net assets order (Hlaciuc and Petris, 2010).

This evidence not only confirms the role of Trancu-Iasi in the process of knowledge transfer but also the ‘social closure’ of the Romanian accounting field (Zelinschi, 2009) that promoted the birth of the National Corpus of Accountants.