Benedictine Accounting. Accounting History Prof. Stefania Servalli Accounting, Accountability and Governance

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1 Benedictine Accounting 1 Accounting History Prof. Stefania Servalli Accounting, Accountability and Governance

2 Outline 2 Saint Benedict Rule: contemplation and effectiveness Organization Management Control Angelo Pietra and his book Indrizzo degli Economi From the past

3 Saint Benedict Rule: Contemplation and effectiveness 3 «Ora» [Pray ] Monastic aspect: ascetism and prayer «et Labora» [and Work ] Production and administration: «If it can be done, the monastery should be so situated that all the necessaries, such as water, the mill, the garden, are enclosed, and the various arts may be plied inside of the monastery so that there may be no need for the monks to go about outside, because it is not good for their souls.

4 Saint Benedict Rule: Organization 4 This is a rule regarding the organization of means One of the pillar of the Rule is the leadership of the Abbot - in his daily activity - in his human features: «he must build the community by the organization»

5 Saint Benedict Rule: Organization 5 The Abbot ought always to remember what he is and what he is called, and to know that to whom much hath been entrusted, from him much will be required; and let him understand what a difficult and arduous task he assumeth in governing souls and accommodating himself to a variety of characters. Let him so adjust and adapt himself to everyone to one gentleness of speech, to another by reproofs, and to still another by entreaties, to each one according to his bent and understanding that he not only suffer no loss in his flock, but may rejoice in the increase of a worthy fold [Rule, ch. II].

6 Saint Benedict Rule: Organization 6 In the model of the Benedictine community identified in the Rule, the Abbot is at the top of the organization: Be free from proud of his position Pay the greatest attention to every single element Work for the common good of the religious community

7 Saint Benedict Rule: Organization 7 Administrative subjects in the Rule ABBOT (Abate) PRIOR (Priore) CELLERER (Cellerario) DEAN (Decano) Equivalent subjects in the contemporary company Chief Executive Officer General Director Managing Director Manager

8 Saint Benedict Rule: Management - Some excerpts from the Rule 8 Of Calling the Brethren for Counsel Whenever weighty matters are to be transacted in the monastery, let the Abbot call together the whole community, and make known the matter which is to be considered. Having heard the brethren's views, let him weigh the matter with himself and do what he thinketh best. It is for this reason, however, we said that all should be called for counsel, because the Lord often revealeth to the younger what is best. [Rule, ch. III]

9 Saint Benedict Rule: Management - Some excerpts from the Rule 9 Of the Deans of the Monastery If the brotherhood is large, let brethren of good repute and holy life be chosen from among them and be appointed Deans; and let them take care of their deaneries in everything according to the commandments of God and the directions of their Abbot. Let such be chosen Deans as the Abbot may safely trust to share his burden. Let them not be chosen for their rank, but for the merit of their life and their wisdom and knowledge; and if any of them, puffed up with pride, should be found blameworthy and, after having been corrected once and again and even a third time, refuseth to amend, let him be deposed, and one who is worthy be placed in his stead. We make the same regulation with reference to the Prior. [Rule, ch. XXI]

10 Saint Benedict Rule: Management - Some excerpts from the Rule 10 The Kind of Man the Cellarer of the Monastery Ought to Be Let there be chosen from the brotherhood as Cellarer of the monastery a wise man, of settled habits, temperate and frugal, not conceited, irritable, resentful, sluggish, or wasteful, but fearing God, who may be as a father to the whole brotherhood. Let him have the charge of everything, let him do nothing without the command of the Abbot [Rule, ch. XXXI]

11 Saint Benedict Rule: Management 11 The Benedictine Communities were Agricultural centre Production centre Knowledge centre Management of different activities: agriculture, farming, wool production, manufacts production, books copying, etc. In the Rule the care of goods/tools is considered fundamental.

12 Saint Benedict Rule: Management 12 Monks must take care of tools, clothes and other objects they are given. Of the Tools and Goods of the Monastery: If anyone, however, handleth the goods of the monastery slovenly or carelessly let him be reprimanded and if he doth not amend let him come under the discipline of the Rule. [Rule, ch. XXXII] Let him [cellerar] regard all the vessels of the monastery and all its substance, as if they were sacred vessels of the altar. Let him neglect nothing and let him not give way to avarice, nor let him be wasteful and a squanderer of the goods of the monastery; but let him do all things in due measure and according to the bidding of his Abbot. [Rule, ch. XXXI]

13 Saint Benedict Rule: Control 13 Inventory Of the Tools and Goods of the Monastery Let the Abbot keep a list of these articles, so that, when the brethren in turn succeed each other in these trusts, he may know what he giveth and what he receiveth back [Rule, Ch. XXXII]. It is a charge and discharge Inventory Indirect charge by the cellarer (Rule, ch. XXXV)

14 Saint Benedict Rule: Control 14 Bronze Door of Montecassino Abbey (Italy): Example of ordered registration of Abbey s goods (typology of goods, places, name of the donor etc.) An inventory in an artwork!

15 Angelo Pietra «Indrizzo degli Economi» 15 Angelo Pietra "Indrizzo degli Economi", Mantova, Francesco Osanna (1586)

16 Angelo Pietra «Indrizzo degli Economi» 16 3 kinds of Ledgers: Bank, Mercantile and Noble Ledger 3 kinds of Inventory: - Stable elements: immobili (quantity) - Effects: credits/debits/stocks (values) - Mobile elements: mobile goods (quantity) Only Effects Inventory is registered in the Noble Ledger Incomplete patrimonial system

17 Beni a disposizione 17 Consegnatari dei beni Inventario dei beni mobili Pietra, Indrizzo degli Economi (1586)

18 18 Angelo Pietra Indrizzo degli Economi (1586) Tavola analitica delle soprascritte quindici partite

19 19 Angelo Pietra Indrizzo degli Economi (1586) Tabella dei conti che confluiscono all'estremo conto Monastero nostro, secondo i due tempi del loro funzionamento

20 Angelo Pietra «Indrizzo degli Economi» 20 Suggest the use of «Istruttione»: Agenda where are indicated the operation to be done in their chronology from June to May «Form of the annual Instruttione for the Cellerar»

21 Forma della Instruttione annuale molto al proposito per lo Padre Celleraro (segue ) 21

22 Forma della Instruttione annuale molto al proposito per lo Padre Celleraro 22

23 Angelo Pietra «Indrizzo degli Economi» 23 Other Books: importance of Memorandum (Vacchette) prepared by Cellerar, Co-Cellerar and Buyer Indication on the recurrence of registrations In the Journal: Use By [Per] // To [a] (By only at the beginning of the page) No numeration of registrations, to avoid difficulties

24 Angelo Pietra «Indrizzo degli Economi» 24 Use of «Partimenti» account (specifying that it is used expecially by merchants dividing their profits) Use of «Introito» e «Esito» to open and close at the beginning and the end of the period He is close to the notion of accrued income/liability [rateo] Attention to flowing information

25 Angelo Pietra «Indrizzo degli Economi» 25 Partial economic results: single farms and other production centres accounts of the monastery Budgets (calcoli) Considering infra-annual changes: Outgoing monk prepared the financial reports using final data referred to the exit day and budget forecasting from that day to the end of the period and you «will see at the end of the year if you have done good extimations» (ch. 62)

26 From the past 26 Benedictine Rule: leadership, organization, management, control interrelated in a unitary perspective Leadership: model based on a leadership for a common interest Organization: A model with the human being at the centre and capable to create knowledge, competencies and realise innovations

27 From the past 27 Management: Consultation of the Community Sharing of responsability (Delegation) Attention to the care of goods Control: Link between administration (Istruttione) and control Ordered Inventories (quanty/values) Ordered accounting (financial reports) Form of budget (calcoli) Partial economic results (cost centres)

28 From the past 28 Fundamental contribution of Benedictines to Accounting in theoretical terms by Angelo Pietra «Indrizzo degli Economi» and its role in Accounting in practices as we can see analysing accounting practices adopetd (Benedictines monastries archivies)

29 References 29 Chapter 24 of Routledge Companion to AH, Carmona and Ezzamel, Religion Dobie, A. (2008a), An analysis of the bursars accounts at Durham Cathedral Priory , Accounting Historians Journal, 35 (2), pp Dobie, A. (2008b), The development of financial management and control in monastic houses and estates in England c , Accounting, Business and Financial History, 18 (2), pp Dobie, A. (2011), A review of the granators' accounts of Durham Cathedral Priory : An early example of process accounting?, Accounting History Review, 21 (1), pp

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