Management aspiration and audit opinion: Fixed asset account

In discussing the form and content of published financial statements prior to 1900, J. R. Edwards (1989) argues that, in a laissez-faire environment, management is free to choose those accounting principles and practices providing maximum utility given the goals of the organization. A study examines the approach to the problem of choice, in the area of fixed asset accounting and reporting, adopted by the board of directors of the Staveley Coal & Iron Co. Ltd. during the 20-year period following its incorporation in 1863. It is concluded that substantial freedom of action was available in this respect in spite of a prestigious and highly qualified external auditor, plus the engagement, from time to time, of an expert engineering consultant.