KAUTILYA ON THE SCOPE AND METHODOLOGY OF ACCOUNTING, ORGANIZATIONAL DESIGN AND THE ROLE OF ETHICS IN ANCIENT INDIA

Accounting Historians Journal, The, Dec 2004 by Sihag, Balbir S

Other critics, analyzing the writing style, question whether Kautilya was the sole author of The Arthashastra. The writing style, at least in ancient India, was quite different from that prevailing today. Mital [pp. 22-23] notes, "On the basis of the opinions of Kautilya expressed in the third person, the view is put forward by Hillebrandt that it is not the work of Kautilya but of a school, and this is also the opinion of Keith and Winternitz. But Kane says: "In order to avoid looking too egotistical ancient writers generally put their views in the third person."

Today, there exists no direct evidence against Kautilya being the sole author of The Arthashastra, nor evidence that it was not written during the 4th century B.C.E.. The indirect evidence, such as the writing style of various segments of The Arthashastra, is insufficient to challenge either the date of its writing or Kautilya as the sole author.

Possible Reasons for the Neglect of The Arthashastra: Kautilya's text was very widely referred to and revered by scholars for more than a thousand years after its writing. Ray [1999, p. 119] observes "Apart from the many authors like Asvaghosa, Kalidas, Bana, Visakhadatta, Dandin and others who were conversant with it, we have references to it and quotations from it right down to the days of Millnatha and Charitravardhana in the 14th and 15th centuries A.D. It may have lost much of its validity with the establishment of the Mogul Empire and particularly with the advent of the British rule."

It is remarkable that The Arthashastra survived the activities of some of the rulers of India. The fact that the text was written in Sanskrit did not facilitate its dissemination. The work resurfaced in 1904 when a manuscript was handed to Mr. Shamasastry, the Librarian at the Mysore Government Oriental Library.

KAUTILYA ON THE SCOPE AND METHODOLOGY OF ACCOUNTING

The use of science is the sight of truth [Kautilya's Sutra, Subramanian, p. 83].

Cushing [1989] observed: "Contemporary academic accountants have not deserted science, but they have in a fundamental sense deserted accounting. The majority of the research in today's leading academic accounting journals applies the research paradigms of economics and psychology within the institutional setting of accounting." He called this a crisis in accounting and suggested that one of the ways to resolve it is to simply redefine the scope of accounting. He concluded, "Accounting may be redefined in scientific terms as the science that attempts to explain and predict the economic performance of individuals or groups responsible for the utilization of economic resources." By contrast, according to Kautilya, explanation and prediction are the key goals for any objective inquiry in accounting. This means that by applying scientific methods, contemporary accountants do not abandon accounting; rather they restore its original status and are prepared to realize its full potential.

Book 15 of The Arthashastra contains just one chapter, 'The Method of Science' but surprisingly it deals exclusively with methodology and interestingly, is placed at the end rather than the beginning of the work. It contains some stylistic rules of the kind that one might find in 'University of Chicago Manual of Style' or the style guide of Accounting Historians Journal. But other rules are more substantive, such as, stating a hypothesis, a verbal (non-technical) reasoning to prove it, a conclusion and a recommendation. It is not claimed, however, that it has the sophistication described by Backhouse [1997, Chapters 3-7], Godfrey-Smith [2003] or Mattessich [2000, Chapter I].