Accounting for Accountability
I expected more from Jacob Soll’s “The
Reckoning.” Soll a history/accounting professor( quite a combination) at USC
and a McArthur “Genius” grant winner offers up his history of accounting from
the early Renaissance to the present and the role that it played in the
development of capitalism and the modern state. As an economics and history
nerd the book should have been right up my alley. However the debits and
credits didn’t bounce off the page. The writing is dry and text bookie.
Soll tells the story of accounting from
the Italian city-states where merchants learned the secrets of double-entry
bookkeeping and where Luca Pacioli wrote his foundational text. Accounting
knowledge follows commerce where Spain ignored it leading to the bankruptcy of
its empire and where Holland embraced it making it the most prosperous place in
Europe. He takes us to Walpole’s England and Colbert’s France. It was in France
where accounting was used to consolidate Louis XIV’s rule and then ignored as
the cost of wars diminished the power of the state.
Soll is most acute in discussing the
role Jacques Necker, Louis XVI finance minister. As the state veered towards bankruptcy Necker
published the official accounts which demonstrated the cravenness of the regime
helping to ignite the revolution. He also discusses Josiah Wedgwood’s use of
cost accounting to justify his use of child labor.
Soll discusses the accounting failures
of the 1920s, the late 1990s, the Great Recession and the rise of the giant
accounting firms. He discusses auditing without really defining what auditors
do and the clear conflicts between auditing and consulting among the accounting
firms.
If there is a theme to his book it is
that good accounting leads to both business and governmental accountability and
without out it a host of problems arise. I just wish Soll’s writing weren’t so
dry.
The full amazon URL appears at: https://www.amazon.com/review/R3OLG7A2YHWIEH/ref=pe_1098610_137716200_cm_rv_eml_rv0_rv
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