THE EVOLUTION OF THE PROFIT CONCEPT: ONE ORGANIZATION'S EXPERIENCE

The accounting innovation and change literature has emphasized the contingent relationship between the accounting system and a variety of environmental forces. This paper utilizes a longitudinal analysis to evaluate this contingent relationship within one nineteenth century organization, The Calvin Company. The results generally are consistent with most findings from the literature. In particular, the study examines the shift in the profit concept to a shortversus a long-term perspective. This has parallels with the emerging role of the corporate form of business organization and the entity, as opposed to, proprietary view of accounting. The accounting system shaped the organizational reality to the extent that the accounting for an event had a subsequent impact upon The Calvin Company's direction. The conclusions highlight the contextual nature of accounting. Accounting and accounting change must be interpreted in terms of the underlying developments within the entity, and within its external environment.