Going where no accounting historian has gone before: A counterfactual history of the early institutionalisation of modern public accountancy

Purpose – The purpose of this paper is to introduce counterfactual analysis and reasoning to the study of accounting history. The counterfactual focus is the institutionalisation of public accountancy in the UK. Design/methodology/approach – The study adopts a counterfactual research design using Ferguson and Bunzl and asks a “what if” question of an event of importance to accounting historians in order to create a plausible counterfactual outcome that is grounded in rationality and causal analysis. The specific counterfactual question relates to the royal charter granted to public accountants practicing in Edinburgh in 1854. The counterfactual outcome is compared to the actual timeline of public accountancy institutionalisation in the UK. Findings – The “alternative” history reveals uncertainties that confronted public accountants in the past and provides a basis for suggesting that the current fractured and inefficient state of institutionalised public accountancy in the UK has its origins at least partially in the 1854 royal charter. It also suggests that attempts to register and unify public accountants in the UK have been hindered by nineteenth century royal charters. Research limitations/implications – The study argues that counterfactual analysis is a useful historical tool with which to understand the consequences of historical decisions made in the professional project of British public accountancy. In addition, the study reveals the potential for counterfactual analysis to illumine the consequences of decisions in other areas of accounting and auditing history. Originality/value – This study is the first counterfactual analysis in the accounting history literature and therefore provides a template for further studies and improved research design.