Degree Name

Doctor of Philosophy


Department of Accountancy


This study is concerned with the use of management accounting in an eighteenth century context through the examination of the accounting systems employed by two firms which operated, in England, in the latter part of that century. The study begins with a discussion of the movements, both social and intellectual, which originated in the Enlightenment of the seventeenth century. Revised attitudes towards science and the search for knowledge led to the notion of 'useful knowledge' which could be applied for the betterment of mankind. Accountancy was considered to be one source of such useful knowledge. The eighteenth century was a time of great change, especially in processes of manufacture, which in a number of industries changed from a domestic based system to a factory based system. This change was influenced by and in turn influenced a number of social changes which are illustrated in the lives of James Watt jnr and Samuel Oldknow as they dealt with the day to day problems of managing their respective businesses. Both men came from different backgrounds yet held a number of similar attitudes, it is suggested that these attitudes led to their use of accounting as an aid to management. Oldknow was involved in the cotton industry, which developed in Britain towards the end of the eighteenth century, and was for a time the leading manufacturer of muslins. Oldknow1 s accounting records reflect the transition from the domestic system to the factory system of manufacture and indicate the changing demand for management information. On the other hand, Watt jnr was a second generation industrialist, trained for his job and appointed to run the Soho Foundry, an enterprise established to manufacture steam engines. The accounting records of this organisation display the use of sophisticated management accounting techniques and are presented as an example of the use of accounting knowledge in the period of the 'Industrial Revolution'. The examples of Watt jnr and Oldknow show uses of accounting information that is in accord with current definitions of management accounting and it is suggested that both men saw accounting as providing knowledge that was both useful and important to them in managing the businesses that they each operated.