Russell L Mathews AO CBE

Citation

Russell Mathews saw war service in New Guinea and Bougainville rising to the rank of Captain. He was cited for bravery and bore the consequences of a serious war-time leg injury for the rest of his life. After the war, he enrolled in the University of Melbourne graduating in 1950 with a Bachelor of Commerce (Honours) and qualifying for membership of the Commonwealth Institute of Accountants. In 1953, he went to the University of Adelaide as Reader in Commercial Studies. In 1962, he wrote his acclaimed text Accounting for Economists which reflected his preferred emphasis on the education of economists. In 1958, he was promoted as Adelaide's first Professor of Commerce. Mathews applied for, and was appointed to, a new chair in the Australian National University in 1964. He was instrumental in 1958 in the founding of the present-day Accounting and Finance Association of Australia and New Zealand, serving as president in 1963. Mathews co-authored Inflation and Company Finance in 1958 which presented a statistical analysis of the accounting effects of inflation on Australian company profits and finances during the years of post-war inflation. It was said to be the first study in Australia of the impact of inflation on corporate profits and finance. In his writings, he advocated the use of valuation adjustments for stocks and fixed capital assets eschewing the application of a general price level index to historical cost data. Russell Mathews was sought after for advice on all matters to do with taxation and fiscal federalism. He served on the Committee on the Future Development of Tertiary Education in Australia (Martin Committee, 1964). In early 1970s, he chaired an Australian Government committee to study the effects of inflation on taxation. Among the recommended reforms were a stock appreciation adjustment and a depreciation valuation adjustment, both on a replacement cost basis. Mathews served as chair of the Review of the Accounting Discipline in Higher Education in 1990. The panel's report made sweeping recommendations with respect to funding, degree structure, teaching and research. During his long service on the Commonwealth Grants Commission, from 1972 to 1990, he was a firm believer in normative approaches to economic enquiry that would assist in policy analysis strongly supporting the need for social justice and full employment. He advocated Keynesian policies for macro-economic management and Galbraithian policies for public sector infrastructure. Russell Mathews wrote or edited 43 books, produced 47 official reports, and wrote in excess of 250 articles. In recognition of his contribution to university education and scholarship, Russell Mathews was elected as a Fellow of the Academy of the Social Sciences in Australia in 1959. His public service was further recognised in 1978 with appointment as Commander of the British Empire. A further approbation saw him made an Officer of the Order of Australia in 1987. On his retirement from Australian National University in 1986, he was rewarded with the title Emeritus Professor.

The Australian Accounting Hall of Fame honours Russell Mathews as an innovator, educator, administrator, consultant, scholar and thinker of the highest order.

Biography

1921 - 2000

Russell Mathews was born in 1921 in Geelong and attended Haileybury College in Melbourne, where he was dux of the school. He went straight from school to work and studied accountancy at night school in order to obtain a qualification. He saw Army service in New Guinea and Bougainville. He rose to the rank of Captain, was cited for bravery and bore the consequences of a serious war-time leg injury for the rest of his life. After the war, he enrolled in the University of Melbourne under the Commonwealth Reconstruction Training Scheme graduating in 1950 with a Bachelor of Commerce (Honours) degree. His major study was in economics with a substantial accounting content. He took some accounting subjects which were taught by A.A. Fitzgerald (AAHoF 2010) and Lou Goldberg (AAHoF 2011) that enabled him to qualify for membership of the Commonwealth Institute of Accountants. Following graduation he moved to Canberra to become a personal assistant to Sir Douglas Copland, the first Vice Chancellor of the recently established Australian National University. In 1953 he went to the University of Adelaide as reader in commercial studies where he was given responsibility for courses in public administration and public finance, as well as accounting and commercial law. Although accounting had been taught at the university since 1902, Mathews was effectively the first full-time teacher of accounting. The distinctive features that he introduced into his first-year accounting syllabus were replacement cost accounting and consolidations.

The text that Mathews wrote in 1962 carried the title Accounting for Economists and reflected his preferred emphasis on the education of economists. This stance was made easier by the fact that the South Australian Institute of Technology, with its own School of Accountancy, was situated immediately adjacent to the University and that it would have been inefficient for the two institutions to run very similar courses. Since the Institute was committed to providing courses leading to professional accountancy qualifications, it was decided that the University's programme should emphasise the needs of students who did not necessarily intend to take up accounting as a profession. The second unit in the accounting stream of the Bachelor of Economics course treated the managerial uses of accounting, and the third year was intended mainly for future accountants, but the work in accounting theory was solidly grounded in economic theory. In 1953, Mathews indicated the objectives, and structure of the new courses in accounting should be influenced by two broad considerations:

  • first, the need to go back to first principles and provide where possible a theoretical basis for the practical work in accounting methods, and
  • second, the need to relate our courses in accounting to the work done in the social sciences of economics, law, statistics, political science, etc. The emphasis throughout will be on theory and principles rather than on techniques, and the approach will be logical rather than mechanical.

In 1962, the year in which he published Accounting for Economists, Mathews elaborated on his strong views regarding university education in accounting suggesting university work in accounting should be analytical rather than merely descriptive ... must be intellectually challenging, ... and have a place on the advancing frontier of knowledge ... [as] one of the basic social sciences [and] the hand-maiden of economics.

His first published article, written while he was an undergraduate student, was Government Accounts for Social Accounting (1948). In 1951, his 12th Commonwealth Institute of Accountants' research lecture was titled New Horizons in Accounting: The Application of Accounting Techniques to Problems of Social Accounting (1952). Five years later, he gave the Australian Society of Accountants' research lecture at the University of Melbourne on Government Accounts and Social Accounting (1957). In 1958, Mathews was promoted to become Adelaide's first professor of commerce. He was instrumental in establishing a Master of Business Management degree which was to comprise two years of full-time study followed by a thesis. Also in 1958, Mathews played an active role in the founding of what was to become, two years later, the Australian Association of University Teachers of Accounting (AAUTA) serving as president in 1963. Mathews' first book, (co-authored with John McB Grant), Inflation and Company Finance, published in 1958 presented a statistical analysis of the accounting effects of inflation on Australian company profits and finances during the years of post-war inflation. It was said to be the first study in Australia of the impact of inflation on corporate profits and finance. Both in Inflation and Company Finance and Accounting for Economists, Mathews advocated the use of valuation adjustments for stocks and fixed capital assets eschewing the application of a general price level index to historical cost data. Mathews contributed to the writing of the chapter that dealt with accountancy education in the Martin Report on the future of tertiary education (1964), and in the following year criticised the Vatter Report (1964) that had been sponsored by the professional accountancy bodies because it proposed a continuing intrusion by the bodies into the educational policies and practices of the universities. Mathews favoured a liberalised undergraduate program in which students would study, in conjunction with accounting, such related disciplines as economics, statistics, mathematics, law and the behavioural fields, with a requirement that they study in depth some of these latter subjects. His view was that the primary role of the universities was to develop accounting as an academic subject. He was firmly of the belief that the accounting bodies role should in the field of professional education at the postgraduate and not the undergraduate level.

In 1964, the Australian National University announced a new Department of Accounting and Public Finance. Mathews applied for and received the new chair. He continued his interest in accounting, although, with the founding in 1972 of the Centre for Research in Federal Financial Relations, of which he became Director, the larger questions of public finance came to occupy almost all of his time and interest. Between 1965 and 1972 he published his last four articles on accounting theory, including one on methodology, with John W. Buckley and Paul Kircher (1968). Between 1965 and 1972, Mathews served on the Accounting and Auditing Research Committee of the Accountancy Research Foundation. In 1971 he wrote The Accounting Framework, a textbook styled as a revised edition of Accounting for Economists.

Russell Mathews was keenly sought after by governments of both persuasions for advice on all matters to do with taxation and fiscal federalism. In early 1970s, a decade of mounting inflationary pressures, Mathews chaired an Australian Government committee to study the effects of inflation on taxation. Among the recommended reforms in the report were a stock appreciation adjustment and a depreciation valuation adjustment, both on a replacement cost basis which dovetailed with the argument that Mathews had been making for profit measurement since the 1950s. Mathews served as a consultant to government bodies as well as a member or chairman of a number of other Government commissions and committees of enquiry including the Review of the Accounting Discipline in Higher Education which he chaired. The review panel's report, rendered in 1990, made sweeping recommendations with respect to funding, degree structure, teaching and research.

During his long service on the Commonwealth Grants Commission, from 1972 to 1990, he was a firm believer in normative approaches to economic enquiry that would assist in policy analysis strongly supporting the need for social justice and full employment. In this regard he was an advocate of Keynesian policies for macro-economic management and Galbraithian policies for public sector infrastructure.

During his long career, Russell Mathews wrote or edited 43 books, produced 47 official reports, and wrote in excess of 250 articles encompassing accounting theory and education, fiscal federalism, taxation theory and policy, and public expenditure theory and policy. His long-time colleague and friend A.D. Barton (AAHoF 2013) remembered him as a gentleman in every way, always polite, considerate, compassionate, friendly, reliable, a great person to work with, never autocratic, leading by example, understanding and kindness, and was always approachable.In recognition of his contribution to university education and scholarship Russell Mathews was elected as a Fellow of the Academy of the Social Sciences in Australia in 1959. His public service was further recognised in 1978 with him being made Commander of the British Empire (CBE). A further approbation saw him made an Officer in the Order of Australia (AO) in 1987. On his retirement from Australian National University Russell Mathews was rewarded with the title Emeritus Professor in 1986