The evolution of bookkeeping methods in China: A Darwinist analysis of developments during the twentieth-century

Abstract

This article reviews the historical development of bookkeeping methods in China during the twentieth century by applying the "Universal Darwinism" theory developed by Dawkins (1983) and Hodgson (2002). According to Dawkins and Hodgson, the biological principles of variation, selection and inheritance can be applied to cultural and other forms of evolution. This article applies these principles to critically evaluate the evolution of double-entry bookkeeping methods in China during the twentieth century. It concludes that bookkeeping methods are selected by their surrounding environment which is determined by the political, economic and cultural factors of that particular period. The methods selected are those that adapt best or are most suited to a change in the environment. Different methods compete for the dominant position. If a single method cannot be exclusively selected, then multiple methods may be permitted to co-exist. This conclusion can also explain why, in general, pluralism is a very prevalent phenomenon in accounting.

Accounting in hybrid forms of capitalist/socialist enterprises: A multiple interpretative approach to the Royal Factory of Silk of San Leucio, 1802–1826

“…The third category consists of industrial companies in a communist context (Barbu et al, 2012; Djatej and Sarikas, 2009; Ji and Lu, 2013; Lin, 2003; Tudor and Mutiu, 2007; Xu et al, 2014; Zelenka and Zelenková, 2013). Such papers show that accounting is to support the control of performance and behaviour, and it is not, of course, aimed at measuring profits.…”

The development of Chinese accounting and bookkeeping before 1850: insights from the Tŏng Tài Shēng business account books (1798–1850)

“…Note also that in A&L's example (1998: 151) (followed by Ji & Lu, 2013) they claim that there was a particular Chinese form of 'doubled-entry' for non-cash transactions whereby the latter were apparently treated 'as if' the transaction had first involved a receipt/payment of cash for the item and then a settlement in cash. In describing the 'Three Feet' system A&L (1998: 150) had also given the example of settling an account payable for firm B in silk, i.e.…”

“…However there have recently been several papers and books published which revive the Sombartian arguments in various forms (reviewed in Hoskin et al 2016b). Relatedly, even before the Great Divergence debate, China scholars have long developed the argument that, while perhaps not achieving all the features of DEB, Chinese businesses and their bookkeepers/accountants over several centuries developed an indigenous form of 'Chinese DEB' (which we here label CDEB) that was needed for the development of the increasingly lively commercial and financial sector in China (see Gardella, 1992;Goody, 1996;Aiken and Lu, 1998;Guo et al 2011;Ji & Lu, 2013). Hoskin et al (2016a) review the literature to date on this argument and, while not challenging the adequacy of China's accounting for assisting the economic development it achieved, set forward reasons for doubting that there was a CDEB that was essentially comparable to Western DEB (of the kind first explained in print by Pacioli in 1494 (e.g., Macve, 1996)).…”

Ideology diffusion and the role of accounting: A Gramscian approach to understanding China’s transition from 1949 to 1957

“…The political role of accounting as a form of social knowledge has been recognized in many notable studies (e.g. Andrew and Cortese, 2013; Evans, 2010; Ferguson et al, 2009; Ji and Lu, 2013; Merino et al 2010; Rodrigues and Craig, 2009; Yee, 2009; Zhang et al, 2012). Understanding this role of accounting in a Chinese context also presents an emerging area of interest.…”

“…Andrew and Cortese, 2013;Zhang et al, 2012;Ferguson et al, 2009;Rodrigues and Craig, 2009;Evans, 2010;Yee, 2009;Merino et al 2010;Ji and Lu, 2013). Understanding this role of accounting in a Chinese context also presents a emerging area of interest.…”