The development of management accounting at the Hudsonís Bay Company, 1670-1820

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Abstract
In their archival study, Roy and Spraakman (1996) found that the Hudson's Bay Company had developed extensive management accounting techniques by the 1820s. However, they did not concern themselves with the origins of the management accounting techniques employed in the 1820s. Based on the Company's archives for 1670 to 1820, it is clear that the basic components of the management accounting techniques were in place from the Company's beginnings or by 1700. These practices were changed significantly in 1810 as the Company grappled with declining profits and the need for new management accounting techniques that allowed for efficiency in inland trading. This trading had different requirements than trading from a few posts with easy ocean access to London. Although the successful techniques were put in place in 1810, it took until the 1820s and the efforts of Governor George Simpson for them to work effectively as a system. This paper also tests hypotheses developed from transaction cost economics and makes suggestions for a transaction cost economics theory of management accounting.

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