The Accounting Historians Journal Vol. 11, No. 2 Fall 1984
Michael James Dailey THE PENNSYLVANIA STATE UNIVERSITY
CYCLICAL ASPECTS OF TWENTIETH CENTURY AMERICAN ACCOUNTING
Abstract: A model of change in twentieth century American accounting is presented. The model describes three-phase cycles, each consisting of a re-active, a proactive, and synthesis phase. The text and Appendix illustrate and attempt to validate the model, and to make projections for the future.
The development of accounting in twentieth century America, as well as of accounting generally, has been chronicled in several excellent texts, some listed in the attached Bibliography, notably: A History of Accounting Thought; Management Accounting: An Historical Perspective; and A History of Accounting in America. These texts utilize a chronological approach, and the intent of this article is to restate these chronologies in a framework which inter-prets them as a cyclical pattern. A model is proposed that divides a cycle of events into three phases. Each cycle is initiated by a reactive phase, progresses through a proactive phase, and termi-nates with a synthesis phase.
The term "reactive" describes the response of the accounting profession to strong, external, environmental forces at the begin-ning of each cycle. These environmental forces may be political, financial, managerial,1 social, technological, or cultural.2 They call for a response from the profession, which takes various institutional actions, issues regulations and rulings, and resolves conflicts. At this stage, responses are reactions to pressure rather than coher-ent, structured formulations.
"Proactive" describes the processes and procedures occurring within the accounting profession itself to bring order to the result-ing chaos. The proactive agents—professional accounting socie-ties, state licensing boards, educators, individual practitioners, and even college/university accreditation agencies—pose questions, seek answers, compromise, and finally innovate to systematically change accounting. The resulting decisions, procedures, guide-lines, etc. are the synthesis, which develops into the beginning