Accounting and internal mechanisms of corporate governance during the inter-war-period in France

Didier Bensadon
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Didier Bensadon: DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique

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Abstract: This article focuses on the role of accounting in governance arrangements. The French context is marked by the inexistence of external governance mechanisms and by the total lack of effectiveness of independent auditing. Therefore, the objective of this article is to shed light on the internal governance mechanisms implemented by the leading French aluminium producer during the inter-war period and the role played by accounting in this implementation. On the basis of the archives of the Compagnie Alais, Froges et Camargue (AFC) between 1921 and 1939, it appears that in a context marked by very strong external growth, management strengthened financial reporting systems and internal control procedures. In addition, the directors used the financial statements as early as 1923 to determine the financial effort of the AFC group and to measure the flows intended to finance the group's material and financial investments. Accounting is unquestionably at the heart of AFC's internal governance mechanisms.

Keywords: aluminium industry; history (search for similar items in EconPapers)
Date: 2021
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Published in Accounting History, 2021, 26 (3), pp.457-483. ⟨10.1177/1032373221989446⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03544147

DOI: 10.1177/1032373221989446

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