Comments on: Accounting: A Brief History

By: Sudha Shenoy: The Evolution Of Accounting (Bibiliography) | LILA RAJIVA: The Mind-Body Politic

Mon, 14 Jun 2010 23:35:14 +0000

[...] Organizations and Markets has this brief bibliography of the evolution of accounting by the distinguished libertarian economic historian, Sudha Shenoy. Accounting emerged without state intervention as a type of Hayekian spontaneous order: “Someone asked whether accounting conventions can be interpreted as a kind of “spontaneous order,” in Hayek’s sense, or if the standard rules are the result mainly of state intervention. Sudha replied with these reading suggestions (lightly edited by me): [...]

By: Ruks

Ruks — Tue, 30 Mar 2010 19:34:36 +0000

Accounting rocks, only lazy people hate it.

By: Gary Peters

Gary Peters — Sun, 18 Mar 2007 19:50:10 +0000

I wonder how Goethe would respond to Ijiri’s “Triple Entry Accounting”?
I am not versed enough to comment on Hayek’s meaning of “spontaneous order”, but it certainly is true that accounting has evolved with the complexity of organizations (and not always as a result of “government” intervention). A prime example, is how we identify or define the owners of an organization versus creditors. Given today’s complex financing arrangements it is not always easy to distinguish between equity versus debt. However, the markets desire and respond to the accounting for both positions.
In the same manner if organizations are formed around the assets they hold, it is not always clear how to identify or value the assets. Case in point, one of the heaviest criticisms of current accounting practice (at least in the U.S.) is the lack of accounting for intangible assets, such as the knowledge created or held by an organization (but even this is subject to ongoing change).

By: Peter Klein

Peter Klein — Fri, 09 Mar 2007 15:55:49 +0000

Richard, I quite agree. In fact, one of the most difficult, challenging, and intellectually stimulating courses I ever took as a graduate student was an accounting seminar on information theory, taught by the brilliant Stefan Reichelstein. And I regard Holmstrom and Tirole (1991) as one of the classics of organizational economics.

By: Richard O. Hammer

Richard O. Hammer — Fri, 09 Mar 2007 15:46:57 +0000

I found accounting to be an exciting subject, as it was taught by Yuji Ijiri at Carnegie-Mellon.

Accounting is boiring only if you assume that all the important decisions have already been made. It might be boring for an accounting clerk whose task could be computerized.

But if the accountant’s task is to design the reporting system then the accountant is as important as the CEO, because the accountant is deciding what information should be presented to the CEO. Indeed, the selection of what information is important to the CEO is the CEO’s job.