Appointed in 1947 as Britain’s first full-time Professor of Accounting at LSE, Baxter helped transform accounting from a largely vocational subject into a rigorous academic discipline grounded in economics. Through his scholarship, teaching, and intellectual leadership, he shaped generations of academics, practitioners, and policymakers across the world.
His influence remains deeply woven into the foundations of accounting thought today.
A Pioneer of Modern Accounting
Baxter’s appointment at LSE marked a defining moment in the history of accounting education in the United Kingdom. Alongside distinguished colleagues, including Harold Edey and David Solomons, sometimes referred to as the “LSE Triumvirate,” he helped establish LSE as an internationally recognised centre for accounting research and scholarship.
At a time when accounting was often viewed primarily as a technical practice, Baxter championed a broader intellectual vision of the discipline, one that connected accounting to economics and decision-making. He consistently argued that accounting matters because it shapes how society understands economic reality.
Together with his colleagues, Baxter helped ensure that LSE accounting students developed strong foundations not only in accounting, but also in economics, law, mathematics, and statistics. This interdisciplinary and economics-based approach regarded management accounting and financial accounting as highly complementary.
Throughout his career, Baxter consistently challenged accepted conventions and encouraged deeper reflection on how accounting information should represent economic reality.
The impact of this intellectual tradition was profound. By 1971, approximately 40 per cent of accounting professors in the United Kingdom had been trained at LSE (Parker, 1997).
The Concept of “Deprival Value”
Baxter is perhaps best known internationally for his pioneering work on accounting valuation and the development of “deprival value” and “relief value” concepts.
He argued that traditional historical cost accounting often failed to reflect economic reality adequately during periods of significant inflation and economic change. His work explored how assets should be valued according to the loss an organisation would suffer if deprived of them, rather than relying solely on historical transaction prices.
These ideas became highly influential in debates surrounding inflation accounting and accounting measurement theory, helping shape subsequent developments in both academic research and professional standard-setting.
Influencing Financial Reporting and Standard Setting
Baxter believed that accounting should do more than simply record transactions; it should help organisations and society make better economic decisions.
His scholarship anticipated many issues that remain central to contemporary accounting debates. His research contributed to wider international discussions on accounting measurement and continues to resonate in debates surrounding fair value accounting and conceptual frameworks for financial reporting.
Baxter’s influence extended well beyond academia into the development of accounting standards and financial reporting practice. Reflecting on this influence, Andrew Lennard of the Accounting Standards Board observed:
“The work of Professor Baxter, and that of his pupils, has had a profound effect on my thinking during the last 15 years working on accounting standards at Accounting Standards Board. I have also learned from his work how complex and powerful ideas can be explained elegantly and simply.”
— Andrew Lennard, Accounting Standards Board (quoted in Bromwich and Macve, 2014)
The Early Years of the Journal of Accounting Research
The Journal of Accounting Research made its debut in 1963 as a collaboration between the University of Chicago and LSE. Baxter served on the editorial team from its inception until 1977, contributing to the development of one of the world’s leading academic accounting journals.
William Baxter on the LSE
In a 1994 interview with Professor Theo Barker, now part of the LSE Oral History collection, Baxter reflected on the intellectual life of the School from the early 1930s onwards. Having first registered as an occasional student before later joining the academic staff, he described the distinctive intellectual culture that shaped both his own thinking and the development of accounting at LSE.
Comparing LSE with his experiences at Edinburgh and Harvard, Baxter recalled the exceptional intellectual atmosphere fostered within the School:
“The impression one got was that LSE’s education was incomparably better. This was particularly true in the field that I was most familiar with which was run by Arnold Plant. He had a seminar for his third-year students. And I went to it and each student in turn gave a paper and I was amazed to see them leaping up to the blackboard and drawing supply and demand diagrams and so on.”
Baxter also reflected on the influence of economists Ronald Coase and Ronald Edwards in shaping accounting thought at LSE through an economics-based perspective:
“Now one thing that deserves note is that two of Plant’s students in particular were brilliant and they were Ronald Coase and Ronald Edwards (…) they began to publish a series of papers in the weekly, The Accountant- they wrote them hurriedly every Wednesday and they were published on Saturday on accounting, looking at it from the cold and rational viewpoint of an economist.”
Discussing the transformation of accounting education in Britain during the 1960s, Baxter highlighted the important role played by LSE in establishing accounting as a university discipline:
“This was still the time when chartered accountants in the City still held doggedly to the view that the best way to become a good accountant was to leave school at 16 and then sit on an office stool and learn through correspondence courses and so on. But that view was being eroded particularly by the arrival of the American firm Arthur Andersen. And by the early ‘sixties the conservatives had to admit they were beaten. I then became clear that the way into the accounting profession would be more and more through a degree at the university, so the university intake of would-be accountants grew. This meant that other universities in Britain began to found departments of accounting and the young people who were trained at LSE had an enormous advantage in getting jobs (…) The School can certainly take great credit for having founded the university teaching of accounting throughout the country on, I think, a sound basis.”
Teacher, Mentor, and Colleague
Baxter was remembered not only for his intellectual contributions, but also for his exceptional commitment to teaching and mentorship.
Former students and colleagues described him as clear, thoughtful, and deeply committed to helping students understand difficult ideas. He was known for explaining concepts with precision and patience, while also bringing fairness, kindness, encouragement, and a sharp sense of humour to his teaching (Bromwich and Macve, 2014).
Reflecting on Baxter’s influence as a teacher, Lance Uggla recalls:
“I think the person that had the most impact on me as I look back over my career (…) the last 35, 40 years would have been Professor William Baxter, who really influenced accounting principles. And still to this day, I can reference back to lectures that I had here at the LSE that make me think of and admire him as a professor.”
— Lance Uggla (MSc Accounting and Finance, 1986)
Richard Macve similarly reflects on the profound impact Baxter had on his academic career:
“I remember my first meeting with Will Baxter in 1973 as he came along the Department’s corridor in level 3, Old Building, to greet me. I had just qualified as an ICAEW Chartered Accountant and come first in the final exams. I was thinking of joining the commercial tutors and be very well paid (including a Porsche) to teach accounting to professional students but Will told me that would be very boring and instead I should teach for LSE (not so well paid and no Porsche). I started by coming in to take a class every week and within a few years was first a temporary lecturer at LSE, then made permanent, and finally became a professor at Aberystwyth University. Congratulating me Will said that now I would never need to do another day’s work for the rest of my life…But I must have done enough because in 1995 I was appointed Professor of Accounting at LSE where I then stayed until I finally fully retired from teaching (but not from research) in 2021. I will always be grateful for the opportunity that Will (together with Professor Harold Edey) gave me and for persuading me to pursue what has been a most rewarding academic career.”
— Richard Macve (MSc Accounting and Finance, 1974–1976; Emeritus Professor of Accounting)
Recognition and International Influence
Baxter’s contributions were recognised internationally throughout his distinguished career.
In 2004, he received the British Accounting Association Lifetime Achievement Award in recognition of his profound contribution to accounting scholarship and education.
In 2005, he was inducted into the American Accounting Association’s Accounting Hall of Fame, one of the profession’s highest honours.
These recognitions reflected not only the originality of his scholarship, but also the enduring global impact of his teaching, mentorship, and intellectual leadership.
Remembering Professor Baxter
Twenty years after his passing, Professor Baxter’s ideas continue to influence accounting scholarship, education, and standard-setting around the world. The Department of Accounting at LSE proudly remembers him as a pioneering scholar, inspiring teacher, and intellectual leader whose legacy endures across generations.