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Merchants' accounts, performance assessment and decision making in mercantilist Britain

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  • Edwards, John Richard
  • Dean, Graeme
  • Clarke, Frank

Abstract

The part played by double entry bookkeeping (DEB) in the rise of capitalism in Western Europe has been the subject of academic attention and debate for more than a century [Miller, P., & Napier, C. (1993). Genealogies of calculation. Accounting, Organizations and Society, 18(7/8), 631-647]. Our interest in this topic was aroused by sources of relevant comment concerning early uses of DEB identified in Chambers' An Accounting Thesaurus (1995). In this paper these sources, augmented by a systematic search of surviving treatises on DEB published in Britain between 1547 and 1799, comprise extended evidence that enable us to make "justified statements" [Napier, C. J. (2002). The historian as auditor: Facts, judgments and evidence. Accounting Historians Journal, 29(2), 131-155] in support of the notion that writers encouraged a "capitalist mentality" [Bryer, R. A. (2000a). The history of accounting and the transition to capitalism in England. Part one: Theory. Accounting, Organizations and Society, 25(2), 131-162; Bryer, R. A. (2000b). The history of accounting and the transition to capitalism in England. Part two: Evidence. Accounting, Organizations and Society, 25(4/5), 327-381] among the rising merchant class. They did this by communicating to merchants the potential of DEB for presenting economic events in a financial form that enabled them to evaluate the amount and profitability of their business investments and provided data on which to base decisions designed to enhance the "Value and Condition of his Estate" (Stephens, 1735, p. 4). Further, based on the known occupations of these writers and drawing on knowledge of the operation of an international trading enterprise, the Hudson's Bay Company, we speculate that DEB might have played a part in helping owners manage their affairs during the major economic and social developments that are known to have occurred in Britain and Western Society more generally between the 16th and 18th centuries.

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  • Edwards, John Richard & Dean, Graeme & Clarke, Frank, 2009. "Merchants' accounts, performance assessment and decision making in mercantilist Britain," Accounting, Organizations and Society, Elsevier, vol. 34(5), pages 551-570, July.
    • Handle: RePEc:eee:aosoci:v:34:y:2009:i:5:p:551-570
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    1. Corrado Cuccurullo & Massimo Aria & Fabrizia Sarto, 2016. "Foundations and trends in performance management. A twenty-five years bibliometric analysis in business and public administration domains," Scientometrics, Springer;Akadémiai Kiadó, vol. 108(2), pages 595-611, August.
    2. Graeme Dean & Frank Clarke, 2012. "When History is Ignored, Business Black Swans and the Use and Abuse of a Notion," Chapters, in: Mohamed Ariff & John H. Farrar & Ahmed M. Khalid (ed.), Regulatory Failure and the Global Financial Crisis, chapter 14, Edward Elgar Publishing.
    3. Ken Peasnell & Graeme Dean & Günther Gebhardt, 2009. "Reflections on the Revision of the IASB Framework by EAA Academics," Abacus, Accounting Foundation, University of Sydney, vol. 45(4), pages 518-527, December.
    4. Hoskin, Keith & Macve, Richard, 2012. "Contesting the indigenous development of “Chinese double-entry bookkeeping” and its significance in China’s economic institutions and business organization before c.1850," LSE Research Online Documents on Economics 42583, London School of Economics and Political Science, LSE Library.
    5. Janni Grouleff Nielsen & Rainer Lueg & Dennis van Liempd, 2019. "Managing Multiple Logics: The Role of Performance Measurement Systems in Social Enterprises," Sustainability, MDPI, vol. 11(8), pages 1-23, April.
    6. Edwards, John Richard, 2016. "Asset valuation, profit measurement and path dependence in Britain to 1800," The British Accounting Review, Elsevier, vol. 48(1), pages 87-101.
    7. S. Mc_W Cheryl & Yannick Lemarchand, 2010. "Accounting as story telling," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 23(1), pages 14-54, January.
    8. Graeme Dean & Frank Clarke & Francesco Capalbo, 2016. "Response to Toms and Bryer," Accounting History Review, Taylor & Francis Journals, vol. 26(1), pages 41-43, March.
    9. Mohamed Ariff & John H. Farrar & Ahmed M. Khalid (ed.), 2012. "Regulatory Failure and the Global Financial Crisis," Books, Edward Elgar Publishing, number 14510.
    10. Gervais, Pierre, 2014. "Early modern merchant strategies and the historicization of market practices," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 15(3), pages 19-29.
    11. Arnold, A.J., 2015. "Accounting's representation of industrial expansion and decline: Some evidence from practice at Vickers Shipbuilding, 1910–24," The British Accounting Review, Elsevier, vol. 47(2), pages 191-203.
    12. Marisleidy Alba Cabañas, 2018. "Tendencias organizacionales y contables contemporáneas," Books, Universidad Externado de Colombia, Facultad de Contaduría Pública, number 08.
    13. Jens Wüstemann & Sonja Wüstemann, 2010. "Why Consistency of Accounting Standards Matters: A Contribution to the Rules‐Versus‐Principles Debate in Financial Reporting," Abacus, Accounting Foundation, University of Sydney, vol. 46(1), pages 1-27, March.

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