Published Accounts, Stewardship, and Decision Making: A Case Study 1863–1940

Abstract

The conventional wisdom is that (i) the published accounts of British registered companies ful fi lled a narrow stewardship role from inception (1844) through to 1947 when the Companies Act added signi fi cantly to statutory disclosure requirements, and (ii) the ‘ decision useful ’ role of published fi nancial reports is the creation of ‘ golden age ’ accounting thinkers in the 1950s and 1960s. Our paper challenges this version of the history of stewardship and decision usefulness based on an in-depth study of the archives of the Staveley Coal and Iron Co. Ltd for the period 1863 – 1940. In so doing, the idea that stewardship and decision usefulness served as competing objectives of fi nancial reporting is rejected as a false dichotomy. Our fi ndings are consistent with Bryer ’ s (1993) proposition that modern fi nancial reporting developed in the late-nineteenth century to provide useful information for purposes of investor decision making. Further, we fi nd that fi nancial reporting practices were based on a conceptual framework within which prudence (or conservatism) served as a fundamental accounting principle.