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Celebrating the Work of an Accounting Great: Professor W.T. Baxter

A Symposium was held at LSE on Saturday 15 July 2006 to celebrate the work of Professor W.T. Baxter, CA, Emeritus Professor of Accounting at LSE. Professor Baxter, the first full-time Professor of Accounting in Great Britain, sadly died on 8 June 2006, just short of his 100th birthday. He was a highly respected and greatly loved teacher, colleague and friend, and the Symposium was a fitting tribute to his achievements as an academic and as an individual. Around 100 former students, colleagues, and members of Professor Baxter's family spent the day listening to presentations by academics and practitioners, who celebrated his significant contributions to accounting theory in areas such as deprival value and the measurement standards applied to accounting, which have led to current developments in accounting standards.

The Symposium opened with a keynote address by Professor Christopher Napier (University of Southampton) who provided an engaging insight into the 'History of Accounting at LSE' over the last hundred years. Professor Baxter's contribution to the School and the development of accounting as a discipline was situated in the context of the School's emerging focus on economic approaches to analysing business issues. Professor Baxter was central to developing undergraduate and postgraduate teaching in this newly-emerging academic discipline that recognised the business needs of the profession, but provided students with a rigorous and theoretically sound basis for understanding how businesses work. This is a tradition that continues at LSE today, with the Department of Accounting focusing on providing the intellectual training and theoretical understanding of accounting as a discipline, leaving the professional accounting firms to train graduates on the practical, number-crunching exercises that form part of a young accountant's daily life.

Following Professor Napier's keynote address, the first session of the Symposium focused on Professor Baxter's theory of deprival value. The practitioner perspective on this concept was provided by Sir Ian Byatt (Past Director General of the Office of Water Services) and Peter Holgate (Senior Technical Partner, PricewaterhouseCoopers). Sir Ian illustrated its use in nationalised and privatised utilities in the UK, and showed how it was critical to setting an initial regulatory capital value. Peter Holgate examined deprival value and its use in current cost accounting and the setting of accounting standards. Professor Michael Bromwich (LSE) then gave an academic view of deprival value, its relationship to other prominent academic accounting theories of current value, and the importance of this concept to the Sandilands Committee and the Accounting Standards Committee.

The afternoon session examined the research importance of Professor Baxter's work, looking at how it had been used in the past, and its relevance today. Professor Shyam Sunder (Yale University and President of the American Accounting Association) looked at Professor Baxter's contribution to the accounting standards debate, and discussed how Professor Baxter was one of the first academics to recognise and articulate the negative consequences of authoritative measurement standards on the accounting profession. Dr Joanne Horton (LSE) described how the concepts of deprival value are still central to the teaching of financial reporting by pointing to the relevance of this work to standard setters obsessed with 'fair value'. The session concluded with a presentation by Professor Ken Peasnell (Lancaster University) who examined where deprival value is today and its role in contemporary financial reporting and potentially again in inflation accounting. Professor Richard Macve (LSE) gave the concluding overview.

Leading figures from both sides of the Atlantic gave oral reminiscences of working with Will. One of the highlights of the day was a presentation made to Mrs Leena Baxter by Emeritus Professor of Economics, Basil Yamey, one of Will's oldest colleagues and friends, who he met in South Africa, and who subsequently became an LSE colleague. Mrs Baxter was presented with a bound book of reminiscences, contributed by people who were Will's students, colleagues and friends. The reminiscences showed the warmth with which former students remembered their teacher and the respect in which he was held by his students and former colleagues. The book of reminiscences can be read here|. The second highlight was the informal reminiscences provided by a number of alumni during the lunchtime reception. The memories shared by these former students reminded all of the participants of Will Baxter's unique nature, his sense of humour and his keen intellectual engagement with accounting history, theory and practice.

The Symposium was jointly and generously sponsored by LSE, the British Accounting Association, the Institute of Chartered Accountants in England and Wales, and the Institute of Chartered Accountants of Scotland (where Professor Baxter trained as a Chartered Accountant). 

The intellectual contributions of the day have now been collected and edited by Professor Pauline Weetman (Strathclyde University) and will appear in the September 2007 edition of Accounting and Business Research (Vol. 37, No. 2) under the title 'Comments on deprival value and standard setting in measurement: from a symposium to celebrate the work of Professor William T. Baxter'.

About Professor W.T. Baxter

Joining the School just after the end of WWII, following periods spent as a student in the USA (at the University of Pennsylvania and Harvard), as a part-time lecturer at the University of Edinburgh, and as Professor at the University of Cape Town, South Africa, Professor Baxter sought to develop accounting as an academic discipline, introducing an economic perspective to the study of accounting, in keeping with well-established LSE academic traditions. He was one of the founders of the Association of University Teachers of Accounting (AUTA) in 1947, which later evolved into today's British Accounting Association (BAA).

Professor Baxter's research set the standard for challenging pre-conceived notions of accounting as purely an exercise in book-keeping. He made seminal contributions in accounting valuation and on the utility of accounting standards. In management accounting he originated the idea that allocating overheads might proxy for opportunity costs. His work has been used, challenged and revised by academics and practitioners across the public and private sectors, and indeed the work he did on deprival value in the 1970s is still being used by public utilities in the UK today.

Together with Professor Sidney Davidson at the University of Chicago, Will edited a classic collection of readings which ran to three editions (the latest being Baxter, W.T. and Davidson, S. (eds.) (1977), Studies in Accounting, London: ICAEW); and in 1963 they jointly founded the Journal of Accounting Research. Will remained a keen researcher in accounting history all his life, and his most recent publication in 2004 gave him an opportunity to provide his observations on the development of systems to record transactions in bartering and various forms of exchange in the US during its colonisation by Britain in the 18th Century (Baxter, W.T., 2004, Observations On Money, Barter And Bookkeeping, Accounting Historians Journal, Vol. 31, No. 1: 129-139).

In teaching, Professor Baxter sought to instil in his students an appreciation of academic enquiry, again in keeping with LSE tradition. Although he retired after 26 years at LSE in 1973, he continued to teach at the School for a number of years after his retirement. His past students have gone on to become senior figures in academic life, as well as in the accountancy profession, business, the public sector and regulatory bodies.

Professor Baxter's work has twice been celebrated in a festschrift from colleagues and students. The first was Debits, Credits, Finance and Profits, edited by Professors Harold Edey and Basil Yamey (London: Sweet & Maxwell, 1974) and the second was Essays in Accounting Thought edited by Professor Irvine Lapsley (Edinburgh: ICAS, 1996).

Professor Baxter was honoured with the BAA's Lifetime Achievement Award (in 2004) and by induction into the American Accounting Hall of Fame (in 2005), and a biographical interview with him by Professor Geoffrey Whittington appeared in Giving an Account: Life Histories of Four CAs, edited by Professor Stephen Walker (Edinburgh: ICAS, 2004), which also includes a full 'Baxter bibliography' up to that date. A tribute by some of his recent LSE colleagues, written shortly before his death, appears as Bromwich, M., Macve, R., and Ranger, D. (2006), Will Baxter: 100 Years Young, British Accounting Review, Vol. 38, No. 2 (June): 221-223.