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According to the Bible, Joseph was born into the privileged House of Jacob. His father adored him and, believing him to be special or ‘chosen', he set him above his half-brothers. They became jealous and sold Joseph into slavery. Joseph ended up in Egypt, where he successfully interpreted the pharaoh's recurring dream. Seven years of plenty followed by seven years of famine. Joseph was put in charge of the country's response to this challenge. He became one of the first directors of resources, planning the deployment of a nation. The origins of accountancy have much to do with the harvest. Hunter-gatherers don't need to keep track of their assets, since they live hand-to-mouth. But settled agrarian communities face a life-and-death calculation. Is there enough food to keep them through the winter? If there isn't, then at some stage, the land will have to be abandoned by some or all the people. Management, logistics and project management all go into this calculation, together with the need for accounting conventions such as prudence and sustainability. The origin of Malthusian economics lies somewhere in this calculation, because food production can only increase arithmetically while populations increase geometrically. So, the calculation about how many people the land can support is a dangerous one. Herein may lay the origin of politics, too. The outcome of Joseph's story is one of success, survival and family reconciliation. Joseph so improved the harvests in the first seven years that he was able to set aside – not the first or last time this phrase could be used in agriculture – sufficient grain to enable Egyptian society to survive the seven-year famine. Even now, it is not unknown for directors of finance to take their political leaders to the very edge of the abyss in the run-up to the annual revenue budget process, only for them to produce a solution as apparently brilliant as Joseph's. There is an interesting point here which is easily overlooked. Biblical Egypt was a single jurisdiction, and a relatively closed economy. In our global village, the calculation of matters such as profitability, depreciation and net worth needs to be consistent, in order that we can judge financial performance across continents. The quest for international accounting standards has been a long and difficult one. The accountancy profession has shown its usual remarkable capacity for combining foresight and vision with detailed and practical problem-solving. As well as the heroes, there is the usual coterie of accounting pedants, seemingly unchanged from Joseph's time, who would still be arguing about the detail in the sixth year of plenty. The problem of implementing common accounting standards is tougher in well-established economies than in developing countries. There are additional complications, such as the applicability of international accounting standards to public service organisations and charities. Even though exceptions are difficult, there are examples where slavish application of private sector values to public service ethics produces tensions, lack of clarity and occasional absurdities. Exceptions are increasingly difficult to negotiate, even for the absurdities, and this is because the public and private sector boundaries are easily blurred in the modern world. We only have to look at the concerns from our European partners over UK Government support to Northern Rock for confirmation. The UK Government has recently developed a remarkable enthusiasm for resource accounting, which is the Treasury's response to the need to conform to international accounting standards. Every set of accounts this century has been one step closer to this ideal. Ironically, local government in the UK has consistently followed these resource accounting principles since at least the 1870s, and probably before. It seems impossible that the finances of a complex government machine could be managed without distinguishing between revenue and capital spending. I think local authority treasurers have been remarkably restrained in listening to civil servants wax lyrical about the benefits of resource accounting. Government accounting has lagged a century behind in implementing good practice. To be fair, the principles adopted by chancellor, now prime minister Gordon Brown set the pattern for greater awareness of costs and investment, and the relationship to the economic cycle. He set out two important rules for financial management of the UK economy. The golden rule says that over the economic cycle, the Government will borrow only to invest and not to finance current spending. The sustainable investment rule says that borrowing to finance investment will be set so as to ensure that net public sector debt, as a proportion of gross domestic product, will be held over the economic cycle at a stable level. There will be arguments about the extent to which any government is bound to follow these self-imposed rules when things get rough, but the approach is undeniably sound. Accountancy is enriched when it reflects clear ethical and managerial standards such as these, and the goal of shared financial and accounting standards across international boundaries feels a worthy one. Joseph would approve. Jim Brooks is executive director of Sector

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WHITEHALL

Feast or famine

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