Doctrines and Schools of Accounting Thought: From Classical Roots to Contemporary Paradigms to Modern Utility

Conceptual Foundations and Definitions of Accounting Doctrine

Doctrine is defined as a set of principles, norms, ideas, or precepts accepted as valid that serve as a guide across various fields of human knowledge, including law, religion, philosophy, politics, and accounting. Broadly, it represents a body of knowledge or a system of thought taught or considered as truth within a specific field. In the specific context of Accounting Doctrine, it constitutes the synthesis of principles, theories, concepts, and postulates that ground accounting as a scientific discipline. The study of this doctrine involves identifying and deepening the understanding of the origins of these ideas and their evolution, while analyzing different schools of accounting thought and their specific contributions to the development of accounting theory.

Epistemology and Paradigms of Accounting Knowledge

The epistemology of accounting focuses on the study of accounting knowledge itself. It seeks to answer fundamental questions regarding the nature of the field, specifically questioning if accounting is a technique, a science, a technology, or a social science. This involves examining various research paradigms that have shaped the field. These include the utilitarian paradigm, which focuses on the usefulness of information; the information paradigm for decision-making; and the interpretive-critical paradigm, which looks at the broader social and structural implications of accounting practices.

Evolutionary Classification of Accounting Schools of Thought

Accounting has been approached through different currents and theories to provide it with scientific, economic, administrative, and legal character. These schools of thought explain the underlying theory and the ultimate purpose of the discipline. Historically, these are categorized into three major periods: first, the Classical Schools; second, the Economic Schools; and third, the Contemporary Schools. Each period reflects a different context and priority regarding what accounting should represent and how it should function within society and business.

The Classical Schools of Accounting Thought (18th Century to Early 20th Century)

The Classical Schools emerged during the birth of organized accounting thought, spanning from the 18th century until the rise of the economic research program in the 20th century. During this era, the primary purpose was the systematic functioning of accounts and their relationship with business administration and economics. Notably, a clear concept of economic value had not yet emerged, nor was there an explicit attempt to formulate broad accounting theories. During this period, the utility of accounting for managerial decision-making was not prominently featured. Major classical theories include the Contista Theory, the Proprietor Theory, the Lombard School, the Jurist-Personalist School, and the Controlist or Materialist School.

Key Theories within the Classical Period

The Contista Theory, pioneered by the Frenchman René Delaporte around 1685, aimed to justify the rules governing the movement of accounts. This theory distinguishes between the moral personality of the company and that of the owner, establishing the principle that for every transaction, someone delivers and someone receives value. Third parties interact with the owner specifically through the entity of the company, and the owner can be viewed as either a debtor or a creditor. Alternatively, the Theory of the Proprietor arose in Great Britain at the end of the 18th century. It posits that the company has a distinct personality from the owner and possesses a patrimony consisting of assets (goods and rights) and liabilities (credits and obligations). This theory served as a crucial antecedent to modern Agency Theory.

The Lombard and Jurist-Personalist Schools

The 19th century saw a flourishing of accounting thought in Italy. The Lombard School, represented by Francisco Villa, sought to create scientific accounting theories linked to business administration. Villa argued that the objective of accounting was firm control, combining economic and administrative notions rather than just bookkeeping. Later, the Jurist-Personalist School, led by Cerboni (1883, 1886), emphasized the legal responsibility of those managing the company’s patrimony. Cerboni viewed the relationship between the owner and "strangers" through the lens of rights and duties: the duties of strangers are the owner's rights, and vice versa. In this framework, "Abono" (credit) was synonymous with "Haber" and "Cargo" (debit) with "Debe."

The Controlist or Materialist School

Founded by Fabio Besta, the Controlist School emphasized the economic character of accounting, defining it as the science of economic control over wealth or "haciendas." This school divided the administration of wealth into three phases: management, direction, and control. Its theoretical purpose was to study the laws of economic control, while its practical goal was the application of those laws. This school introduced patrimonial theorems where capital is defined as a function of assets and liabilities. It is considered a transitional school leading toward Neocontism.

The Economic Schools of Accounting Thought (19th and 20th Centuries)

The Economic Schools arrived with the expansion of the economy in the 19th and 20th centuries. As categorized by Caibao (1975), accounting objectives shifted toward the economic aspects of business activity. During this phase, "economic value" became a consubstantial element of accounting. This period saw the rise of "Neocontism" in France, Germany, Italy, and the United States, which adapted mathematical, philosophical, and behavioral sciences into accounting. Prominent schools include European Economic Neocontism, the German School of European Economics, the Patrimonialist School in Italy, and the Economic-Deductive School in the United States.

European and French Economic Neocontism

Leo Gomberg (1908) introduced European Economic Neocontism through "Economology," which studies the economic activity of the company before, during, and after its operations. In this view, capital is the cause, and investment is the effect. Concurrently, French Economic Neocontism, supported by scholars like Jean Bournisien (1919), René Delaporte (1922), and Jean Dumarchey (1919), established value as the "cornerstone" of accounting. They defined accounting as the science of accounts representing the transformation and classification of values, serving historical, statistical, financial, legal, and control functions.

The German and Italian Economic Developments

The German School emphasized a highly evolved concept of value and the determination of "benefit" (profit) through rigorous analysis of reality. It argued that economic knowledge results from empirical study rather than purely intellectual development. In Italy, Gino Zappa (1950) linked accounting to the "Economía Hacendal," a unified science of administrative doctrine, scientific organization, and accounting disclosure. Vicenzo Masi (1956) furthered this with the Patrimonialist School, stating that accounting studies all patrimonial phenomena—including legal, economic, financial, and social aspects•in both static and dynamic, as well as qualitative and quantitative terms.

Neocontism in the United States

In the first half of the 20th century, US accounting thought split into inductive and deductive approaches. The inductive approach, supported by Sanders, Hatfield, and More (1938), prioritized justifying current practices over building abstract theories, arguing that principles are derived from observation and experience. They classified regularities into five groups: income statements, balances, consolidated states, comments, and footnotes. The deductive approach, led by Sprague (1907), Paton (1922), and others, used logical inference to justify or critique practices and redefine technical terms.

The North American Economic-Deductive School

Represented by thinkers like Sprouse, Moonitz, Edwards, Bell, Chambers, and Sterling, this school holds that accounting is anchored in economic theory and profit calculation rules. It employs a deductive logic to generalize basic concepts for financial accounting. This school maintains a positivist approach with teleological (goal-oriented) normative derivations. Its valuation methods focus on "entry values" (replacement costs) and "exit values" (net realization values).

Contemporary Schools and the Paradigm of Utility

Contemporary accounting thought is dominated by the Paradigm of Utility, championed by Staubus (1986), Peasnell (1981), and Tua (1989). This paradigm marks a shift from focusing solely on wealth and income measurement to prioritizing the needs of users and the objectives of financial information. It emphasizes the evolution of the concept of the "user," requirements for information to be useful, and the expansion of accounting regulation into new realms. Here, the scientific character of accounting is seen through its application in satisfying user needs through normative standards.

Modern Empirical Research and the Conceptual Framework

Current accounting research follows several empirical tracks: the inductive positivist approach (studying practices to find underlying principles), decision models (providing predictive data for liquidity and solvency), and market-based research (examining how accounting figures drive stock market variables). There is also a focus on user behavior, studying motivations and preferences. The reformulation of the Economic-Deductive School has culminated in the "Conceptual Framework." This framework uses a logical-deductive and teleological approach to define the orientation for standard-setters, establishing a semantic-deductive hierarchy: Postulates - Principles - Norms, all aimed at general-purpose financial accounting.