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School of Business and Management

School Research Seminar Series

2 October 2013

Time: 1:00 - 2:00pm
Venue: Francis Bancroft Building, Room FB4.04/08 (4th Floor)

Time: 1.00 - 2.00pm 

Seminar Title

NO BLOOD MONEY: accounting interventions to limit war profiteering, 1939-40

The Advisory Accountancy Panel in the Department of Supply and Development


Dr Phillip Cobbin, The University of Melbourne


Phill Cobbin is a Senior Lecturer in the Department of Accounting, Melbourne Business School, The University of Melbourne. Prior to joining academia he worked as a Chartered Accountant in the Melbourne and London offices of Price Waterhouse & Co. He is also a commissioned officer in the Army Reserve with the Royal Australian Army Pay Corps (currently on the Standby Reserve list). His research centres on the history of accounting and auditing particularly where accounting and auditing history intersect with contemporary military history. Of particular interest is the role and contribution of the Australian accounting profession in the ‘business’ of war through a number of agencies established to provide specialist accounting advice to the Australian Government during the war of 1939-1945. This work mainly focuses on the costing of munitions in private manufacturing facilities and the promotion of efficiency within the Department of Army. 


The historiography of accounting in Australia over 125 years and the extant military history of the country over two centuries is extensive and diverse. As far as World War 2 is concerned both historical dimensions are lamentably deficient regarding the role played by members of the Australian accounting profession.  In extant works the contribution of the Australian accounting is accorded variously some acknowledgment, minimal comment and disappointingly sparse detail. Unfortunately, those who have chronicled Australia’s role in the conflict have been less than generous to the accounting profession. The objective of this paper is to redress this imbalance. When private, commercial interests were engaged, for the first time in Australia, in the manufacture of munitions for profit, the matter of reimbursable manufacturing costs emerged as a contentious issue. Immediately prior to the outbreak of World War 2, the Australian accounting profession, as the repository of state-of-the-art expertise in the relatively nascent discipline of costing, was tasked, through an advisory panel of senior specialists, to advise on how to ensure, on the one hand, private contractors were remunerated in a fair and reasonable manner on commercial terms whilst simultaneously ensuring no unfair advantage was taken by those same private interests.

 Focusing on the key elements of manufacturing cost, the Advisory Accountancy Panel in the Department of Supply and Development provided advice on labour, material and manufacturing overheads. Importantly, the advice provided about manufacturing overhead involved a specific-identification-of-costs methodology rather than the utilisation of an overhead-expense recovery rate. While the advice on labour and materials complemented extant thinking, the advice proffered on overhead was at variance with the ideas articulated in the contemporary accounting literature. Drawing on extensive archival material retained by the National Archives of Australia, this paper describes, through the lens of the reports submitted by the panel, the evolution of ideas that underpinned the professional advice provided to government at the time. It also seeks an explanation of the advice on overheads that was contrary to contemporary practice. In so doing the paper not only addresses the issue of cost identification but also the advice provided by the panel on how to manage and control the quantum of costs claimed for reimbursement. In this way it not only adds to the military and accounting historiographical record but also to the continually evolving historiography of the development of costing and cost accounting. While the paper is informed by the extensive archival resources available it is also constrained by the same material as it is limited to (i) reports prepared by members of the panel, (ii) correspondence between parties to the arrangements in place, and (iii) other government documents. Working papers and other records  of the deliberations of the panel have, so far, not been discovered within the archive. In reality the latter materials are unlikely to have survived. The findings of the research are therefore limited to the interpretations and deductions made from the available material. The panel provided important advice at a critical juncture in the nation-wide preparations for the inevitable conflict and despite its relatively short lifespan and partially contrarian approach, established a legacy of codified advice that was of immense value to munitions manufacturing interests for the duration of the war.

Research themes

Management and Organisation

Additional information

The seminar will run from 1.00 to 2:00pm (suggested: 50 minute talk and 10 minute Q&A)

Chaired by: Sean McCartney

To confirm your attendance please email 

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