Process of accounting innovation: The publication of consolidated accounts in Britain in 1910

              The Accounting Historians Journal Vol. 18, No. 2 December 1991
John Richard Edwards THE UNIVERSITY OF WALES COLLEGE OF CARDIFF
THE PROCESS OF ACCOUNTING INNOVATION: THE PUBLICATION OF CONSOLIDATED ACCOUNTS IN BRITAIN IN 1910
Abstract: The first known example of a consolidated balance sheet published by a British company was made available to shareholders of the Pearson and Knowles Coal and Iron Company Ltd. in 1910. This paper examines the reasons for this accounting change and investi-gates the source of the necessary expertise. The conclusion reached is that, in common with many other accounting innovations, evolution-ary change occurred as the result of modifications to an existing busi-ness practice.
The process of change in accounting is a topic of both interest and importance; however, as a number of writers have pointed out, it remains a neglected area requiring further research [Hopwood, 1987; Previts, Parker and Coffman, 1990]. Change may come about as the result of an invention (revolutionary change) or the gradual development of a new technique as the result of nu-merous minor modifications to an existing practice (evolutionary change). The more widespread use of the new method may occur, in turn, either voluntarily or as the result of regulation. Parker [1977] has identified the following as important 'change agents': textbooks, teachers, companies, government agencies, accounting organizations, accountants and businessmen.1
The purpose of this paper is to explore the process of account-ing change by focusing on the decision made by the directors of the Pearson and Knowles Coal and Iron Co. Ltd. (PK Ltd.), in 1910, to publish a consolidated balance sheet. To achieve this ob-jective, the paper:
1Parker was focusing principally on the international diffusion of accounting thought and practice, and his nomenclature has been amended and extended to cover intranational dissemination.