The emergence of uniform principles of cost accounting in Sweden 1900-36

The purpose of this article, using evidence from the archives of ASEA, of contemporary publications, and of statements by eye witnesses, is to identify and describe the principal forces and actors which shaped the Swedish cost accounting system, a system moulded in a process starting in the early twentieth century and ending in 1936 with the approval of a set of recommendations for uniform principles of cost accounting. These recommendations, with the terminology and practice they specify, are still taught to students of accountancy in Sweden; they are applied in many Swedish companies, and have influenced practice also in other Nordic countries. The process of standardization was initiated by influences from the United States but was later influenced mainly by the contemporary German process of standardization. This paper questions the traditional view that the Swedish uniform principles originated in German cost accounting, and was the result of a battle between American practice (as exemplified by SKF) and German practice (as represented by ASEA). It will be shown that the Swedish uniform principles are based on ASEA's system, implemented in 1919, and that while not dissimilar to what later became known as German practice, may equally well have been derived from American practice and cost accounting debate. We shall also show that the process was driven by engineers, many of whom had worked in the United States, were involved in the efficiency movement and were proponents of scientific management.