The development of cost and management accounting in Britain

This chapter surveys the history of cost/management accounting (C/MA) in Britain from medieval times to 1970. C/MA is the arena within which the ‘right way’ of studying accounting history has been the subject of vigorous debate. We therefore commence our investigation with a consideration of the ways in which scholars, of various theoretical persuasions, have applied their analytical lenses to the study of C/MA's history. In this context, we also reflect on the significance of burgeoning research findings for our understanding of accounting's past, while drawing attention to disagreements over what the available evidence actually means. Our chapter is further contextualised through an examination of the various sites in Britain where C/MA has been practised during our study period and, from our principally economic rationalist standpoint, through a rehearsal of factors judged to have influenced the development of C/MA. We then move on to examine the development of C/MA theory as exemplified in the literature published, within and outside accounting treatises, from the late-seventeenth century onwards. We draw attention to the upsurge in writing about C/MA following the so-called ‘costing renaissance’, c. 1870, and assess the significance of both the scientification and professionalisation of accounting during the early decades of the twentieth century. We reveal, in the post-World War II period, a growing focus on C/MA narratives as an aid to management, as epitomised by writings on standard costing, budgetary control, uniform costing and marginal costing. Our study of British C/MA practice also follows a temporal pattern. The plethora of material now available and changes in the nature though not necessarily the purposes of C/MA have encouraged us to survey, separately, practices employed during the pre- and post-costing renaissance periods. Indeed, the explicit theme underpinning this part of our chapter is that calculative techniques have been used for centuries for the common purposes of planning, decision making and control. The growing formalisation of C/MA processes, as the discipline became increasingly professionalised during the twentieth century, is illustrated through a re-examination of the four key areas focused on in the contemporary literature. Given its great significance for British industry, British society and, for some, British C/MA practice, the impact of World War I is also singled out for particular attention. Finally, the chapter explores (briefly) the relationship between C/MA theory and practice, concluding that, despite the wealth of research findings available compared to many other aspects of accounting's past, on this, as with many other issues, the ‘jury is still out’