Controlling Expenditure, or the Slow Emergence of Costing at the Venice Arsenal, 1586–1633

Abstract

This paper aims to aid our understanding of the emergence of accounting as a control instrument in complex proto-industrial settings, through its perceived capacity of mirroring the production process. The paper starts off from an archival document, the 1586 deliberation by the Venetian Senate, which imposed on the Arsenal a stocktaking to be conducted every three years, and ad hoc galley production accounts to be kept in double entry format, where the passage of materials and work-in-process between units were recorded both in physical quantity and value. In this deliberation the Venetian Senate was clearly posing explicitly the problem of costing and the efficient use of resources within the Arsenal. Until then, the Senate controlled this organisation only by limiting the funds allocated to activities (wages, oars, 'stuffs') without entering into the substance of the operations. Two interrelated investigations are carried out. First, a content analysis of the 1586 document is made. Second, the question of its 'impact' on the Arsenal's actual accounting practices is addressed. In a 1633 Report by Alvise Molin, a magistrate of the Republic, some elements of the 1586 deliberation seem to surface, insofar as a quite sophisticated calculation of the production costs of galleys is provided. In this sense it might well be that the notion of cost emerged as a sort of 'accidental by-product' of the Senate's efforts aimed at introducing tighter forms of control on the Arsenal.

Saint Anna’s Hospital in Ferrara, Italy: Accounting and organizational change during the Devolution

“…Thus, the very notion of cost, to some extent, seems to "emerge" beyond transactions as a tighter form of control while accounting is seen to be slowly transformed into a tool for controlling and managing a complex organization. This is supportive of a similar conclusion reached by Zambon and Zan (2007), although in a different organizational setting.…”

Alberto Ceccherelli (1885–1958): pioneer in the history of accounting practice and leader in international dissemination

“…Thus, cost accounting, tracking raw material costs and wages, played a pivotal role in medieval companies. In this respect, we can note earlier studies that relied on a similar assumption that cost-accounting practices were widespread in Italy in the Middle Ages (Edler 1937;Garner 1947;Solomons 1952;De Roover 1955;Mills 1994 attempted to prove that cost-accounting practices were widespread before the industrial revolution (Edwards and Newell 1991;Fleischman and Parker 1991;Carmona 2007;Zambon and Zan 2007). Accounting historians following the genealogical approach focus on the way in which calculative technologies were connected with cost calculation and how they were developed, linked together and functioned according to routines (Miller and Napier 1993, 639).…”

Multiple Origins of Accounting? An Early Italian Example of the Development of Accounting for Managerial Purposes

“…However, outside of the activities of the state-run Venice Arsenale in the 17th century (Zan, 2004;Zambon and Zan, 2005), and the sock and stockings shop of Domenico Bettini from Bologna in the 18th century (Giusberti, 1991), few published works have examined costing activities in Italian industrial enterprises since the 18th century, let alone profit-oriented ones. One explanation for this is that, for much of the 18th and 19th centuries, the economy of the Italian states was heavily reliant on agriculture.…”