In honor of the Olympic Games, I decided to write about the role of the United Kingdom in accounting’s history. Originally, I considered doing something on the Scottish Chartered Accountants. Once I delved into it, I realized I was in over my head. It is like trying to write a quick blog post on the effects Shakespeare had on English literature. Not that I will ignore the monument effects of the Scots on accounting, it will just take me more than the 17 days the Olympics give me to properly write about it.
There have been dozens of authors of accounting textbooks since Pacioli. Each one tries to tweak or perfect the Italian method of double entry accounting. Edward T. Jones is one of my favorite. Not because I really think he added anything to the profession. Rather. I admire how much money he made from a textbook that added so little to the practice of accounting. (I’m looking at you modern textbook companies.)
I first came across Jones’s English System of Book-keeping, by Single or Double Entry (1796) when I was researching Pacioli. I was researching the movement of the italian method across Europe. Jones’s book was one of the earliest accounting textbooks I could find being written English. At the time, I did not understand how the Italian roots of accounting went untaught. I found part of my answer with Jones. He tried to undercut and essentially destroy the Italian method by designing his own English method. The joke in this all is, for all his insulting of the italian method, his system does nothing to deviate from its principles.
A poorly written book does not a successful author make. So how did Jones make all his money? kickstarter.com (well, sort of) He sold pre-orders of his book through a sort of prospectus. At the cost of a guinea, it gave the purchaser a subscription to the book as well at a license to use the practice of accounting used in the book. The prospectus was was filled with testimonies and lists of his subscribers. Somehow he elicited subscriptions from the governor or the Bank of England and Peele (an accountant who wrote good textbooks). So essentially, Jones could say all these famous and respected men bought the license to use his accounting system, when in reality they probably had a mild curiosity about Jones’s “new system”.
Historic Conversion
So unless you are a History major or a huge fan of English Literature,you probably don’t know how to convert outdated British currency. I was happy to found the answer outside of Wikipedia. All of the following comes from a website http://projectbritain.com/.
1 guinea = 21 shillings
1 pound = 20 shillings
So why have two denominations for relatively the same amount of money? Status. The guinea was the gentleman’s coin. You paid workers in shillings and fellow gentlemen in guineas.
The £1.05 Jones’s book/license cost roughly converts to $20 in today’s money.
As a post-script. Jones's system was so confusing and so prone to arithmetic errors that by 1831 the author himself abandoned its use.
Editors Note:
For all of you who watched the opening ceremonies of the Olympics last Friday, you are familiar with the amusing geography lessons of Bob Costas. He is always eager to explain why North Korea marches in with the Ds (Democratic People's Republic of Korea) and all the different names the Ivory Coast go by. What he didn't teach us this year is why sometimes it is Great Britian, sometime it is United Kingdom, and on rare occasion it is England. If anyone can answer this for me without looking at Wikipedia or Yahoo Answers, I would really appreciate it.
Sources:
- Brown, R. A History of Accounting and Accountants. (1905)
- Edwards, J. R. The Routledge Companion to Accounting History. (2009)
- Kojima, O. Accounting History. (1995)
- Parker R. H., Yamey B. S. Accounting History: Some British Contributions. (1994)
