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Standard costing and budgetary control in the British iron and steel industry: A study of accounting change

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Title:	Standard costing and budgetary control in the British iron and steel industry: A study of accounting change
Author(s):	John Richard Edwards, (Cardiff Business School, Cardiff, UK), Trevor Boyns, (Cardiff Business School, Cardiff, UK), Mark Matthews, (Cardiff Business School, Cardiff, UK)
Citation:	John Richard Edwards, Trevor Boyns, Mark Matthews, (2002) "Standard costing and budgetary control in the British iron and steel industry: A study of accounting change", Accounting, Auditing & Accountability Journal, Vol. 15 Iss: 1, pp.12 - 45
Keywords:	Accounting history, Management accounting, Scientific management, Standard costing
Article type:	Literature review
DOI:	10.1108/09513570210418879 (Permanent URL)
Publisher:	MCB UP Ltd
Abstract:	The use of accounting to help apply the principles of scientific management to business affairs is associated with the adoption of standard costing and budgetary control. This first British industry-based study of the implementation of these calculative techniques makes use of the case study research tool to interrogate archival data relating to leading iron and steel companies. We demonstrate the adoption of standard costing and budgetary control early on (during the inter-war period) by a single economic unit, United Steel Companies Ltd, where innovation is attributed to the engineering and scientific background and US experiences of key personnel. Elsewhere, significant management accounting change occurred only with the collapse in iron and steel corporate profitability that began to become apparent in the late 1950s. The process of accounting change is addressed and the significance for our study of the notions of evolution and historical discontinuity is examined. The paper is contextualised through an assessment of initiatives from industry-based regulatory bodies and consideration of the economic circumstances and business conditions within which management accounting practices were the subject of radical revision.