The genesis of professional organisation in English accountancy

The organisation of accountants in Liverpool, London, Manchester and Sheffield during the 1870s has not been subject to exhaustive historical investigation. This paper analyses the first organisations of accountants in England in the context of theories of jurisdictional boundaries, occupational conflict, the creation of labour market shelters and social closure. It is shown that the Bankruptcy Act, 1869 disturbed the division of labour between accountants and lawyers and threatened the status of established accountants by encouraging competition from lesser practitioners. The study illustrates that the organisation of accountants in Liverpool was instigated by lawyers anxious to establish a medium for negotiating the boundaries of bankruptcy work with local accountants. In London, Manchester and Sheffield (and partly in Liverpool) organisation concerned the protection of established accountants from interlopers and was actualised by erecting market shelters and the imposition of exclusionary closure. Organisation was a device for the institutionalisation of occupational difference and protecting market advantage. During the 1870s the occupation of accountant was bifurcated into professional practitioners, marked by the badge of organisational membership, and less reputable individuals who were denied it. It is also contended that inter and intra professional conflict are pervasive themes in professional organisation and that individual actors were significant to engineering formation processes.     

Lifestyle,status and occupational differentiation in Victorian accountancy

New insights are offered to the professionalization of accountants in Britain circa 1881 by examining the private foundations of occupational status and identity as manifested by domestic arrangements and residence patterns. Drawing on literature pertaining to the relationship between consumption and socio-cultural differentiation the study deploys empirical evidence from the British census to analyse status identifiers such as servant keeping, household location and neighbourhood composition. These aspects of lifestyle are taken as signifying practices of middle-class affiliation and narratives of the social identification of professional accountants. The extent to which accountants achieved status through consumption practices is illustrated by comparisons with a range of other occupational groups and social classes in Victorian Britain.     

The ‘public auditor’: an experiment in effective accountability

Mutual associations were created to provide, through a system of self-help, for the welfare of members of the British working class increasingly separated from the family unit characteristic of an agricultural-based economy. The appropriate method for protecting the resources required at some future date by the poorly off in conditions of need produced a challenge for Parliament. This paper examines the development of the concept of the ‘public auditor’ to describe the individuals considered suitable to undertake the audit of mutual associations, and the increasing statutory emphasis on the desirability of appointing a person ‘carrying on publicly the business of an accountant’ to certify the annual returns made to the Registrar of Friendly Societies. This paper argues that statutory recognition of the accountant as a member of a skilled occupational group represents an important stage in the professionalisation process. This paper shows that the concept of the public auditor was rejected by most mutual associations, while the larger organisations made the voluntary decision to appoint professional accountants to undertake the audit function.     

Claiming a jurisdiction for the “Public Accountant” in England prior to organisational fusion

This paper exploits the interpretive content of city-based directories to demonstrate the emergence of “public accountants” as a professional grouping in England during the period 1800–1880, and it applies Andrew Abbott’s The System of the Professions (1988) to explain the broader significance of that finding. We reveal that, by the 1870s, “public accountants” in England had achieved public recognition as expert suppliers of services over which they possessed an effective jurisdiction, and we conclude that Abbott’s theory provides a meaningful framework for explaining the history of public accounting prior to organisational fusion in 1880. We also consider why the label “public accountant” failed to satisfy the conditions identified by Abbott’s analytical framework for the continuing success of their professional project, and conclude that the need for a more effective means of occupational differentiation led to the reconstruction of a public accountancy profession based instead on the title “chartered accountant”.     

Cutting to the core? A reflection upon recent education policy debates within the Institute of Chartered Accountants in England and Wales

Knowledge is widely regarded as a characteristic of professions, but given the ever-increasing knowledge base, professional accountancy bodies have begun to question whether professional examinations can continue to cover all areas relevant to the work of accountants. At the heart of the debate about how the professional knowledge base is to be defined lie questions about how chartered accountants are ‘made’. This paper discusses the introduction of a ‘core and options’ model for professional accountancy education as a possible means of ‘making the chartered accountant’. Using Porter's (1981) theory of historical explanation, it discusses an episode in the recent history of education policy at The Institute of Chartered Accountants in England and Wales (ICAEW) which illuminates aspects of the core and options model. The paper concludes that, while the introduction of core curricula in accounting education can be justified on educational grounds, the rejection of core curricula by ICAEW suggests that educational debates were strongly influenced by the wider political, economic, social and professional environments and the resultant educational policy can be viewed as the product of a variety of competing agendas.     

Occupational differentiation and exclusion in early Canadian accountancy

Canada’s 1881 census enumerators posed a range of questions that provide scope for an in–depth investigation of the identity of its accounting functionaries (accountants and bookkeepers) in that year. The significance of our findings is explained by applying the concept of closure through exclusion and occupational differentiation. We discover that Canada’s accounting community, at the dawn of professional organisation, was dominated by people originating from Great Britain & Ireland. The rural/urban divide for Canada’s accountants is the inverse of that for the population as a whole and, as in Britain, congregation occurs around the major commercial ports. Significant differentiation exists between the demographic profile of Canada’s accounting functionaries compared with its entire population and between that of accountants compared with bookkeepers. Strong evidence of exclusionary closure is revealed through an analysis of the demographic characteristics of the initial leaderships of Canada’s early accounting associations. The paper concludes by identifying opportunities for further research.     

A Framework of Best Practice of Continuing Professional Development for the Accounting Profession

Abstract

The International Accounting Education Standards Board (IAESB) places a strong emphasis on individual professionals taking responsibility for their Continuing Professional Development (CPD). On the other hand, the roles performed by professional accountants have evolved out of practical necessity to ‘best’ suit the diverse needs of business in a global economy. This diversity has meant that professional accountants are seen in highly specialised roles requiring diverse skill sets. In order to enhance the contribution of the accountant as a knowledge professional for business, it follows that CPD that leverages off an individual's experience should be designed to meet the needs of professionals across the different specialised roles within the profession. In doing so the project identifies how CPD should differ across roles and levels of organisational responsibility for accounting professionals. The study also makes a number of policy recommendations to IAESB and IFAC.     

Quantitative skills: is there an expectation gap between the education and practice of management accountants?

The extent to which management accountants are receiving appropriate training in quantitative methods is examined. It finds a disparity between the wide range of quantitative techniques covered within the Chartered Institute of Management Accountants' syllabi and the limited use made of many of the techniques in practice. It also reports a rich picture of differing expectations of the role of quantitative skills in the work of a management accountant. The study finds that quantitative skills are seen by both employers and accounting educators as contributing to the portfolio of skills required by management accountants. Also, they give a rigour to the examination process that is seen as a challenging ‘rite of passage’ into the profession. It is concluded that knowledge and understanding of the range of quantitative techniques available to organizations is a powerful differentiator for the accounting profession, even if the occasions upon which accountants are required to draw upon much of that knowledge are few and far between.     

Is it Shameful to be an Accountant? GenMe Perception(s) of Accountants' Ethics

The function that accountants fulfil in the economic system is dependent on their ability to maintain the perception of high ethical standards. Building on the idea that birth cohorts, otherwise known as generations, are a useful proxy for the socio‐cultural environment of different time periods, we focus on the so‐called ‘GenMe’, that is, students and young workers born in the 1980s and 1990s. In particular, combining the accounting and business ethics literature, the purpose of our paper is to contribute to an increased awareness of the GenMe perceptions of accountants, with special attention given to ethical aspects. We believe that the perceptions of this age group are particularly crucial for the future of the accounting profession as it is these young people who will either become professional accountants or the accountants' future clients. Using an extensive database of 1,794 questionnaires, results show that the impression of the accountant as a corrupt professional is not dominant among GenMe and seem to suggest the existence of a multifaceted perception of accountants' ethics. Specifically, the factors that contribute to influencing GenMe perceptions of accountants' ethics are level of education, having attended an accounting course at high school level, gender, and belonging to the accounting profession. Finally, our study indicates that there is room for improving public perceptions of accountants' ethics through university courses in ethics, continuing education programs, and focused communication strategies by accounting firms and professional bodies.     

'A Public Expert in Matters of Account': Defining the Chartered Accountant in England and Wales

This study addresses the attempts by the Institute of Chartered Accountants in England and Wales (ICAEW) to set its professional boundaries based on the performance of work in order to create a definition of the specialist chartered accountant or 'public expert in matters of account'. The article, located in the 1880-1900 period, provides an insight into the activities and arenas in which chartered accountants could engage. The complexities associated with this demarcation between permissible and non-permissible activities, revealed through a series of 'test cases', were exacerbated by the 'grandfather clauses' contained in the ICAEW's Royal Charter.     

The construction of accountant identity in a transitioning economy: the case of Vietnam

This study investigates the complex and multi‐faceted ways in which Vietnamese accountants have (re)constructed their occupational identity within a context of ongoing socio‐political and economic development. The concept of ‘identity work’ and Bourdieu's notions of field, habitus and capital guide the investigation, with the evidence base comprising a series of interviews with Vietnamese accountants. Three interpretive schemes are identified as ‘operating principles’ that characterise accountants’ identity construction. These patterns are outcomes of the negotiations of accountants with their respective institutional environment in which accountants’ negotiating power is fuelled by their experience (habitus) and capital (economic, social and cultural capital).     

Mediating Interests: The Accountancy Bodies' Responses to the McFarlane Report

There is now a considerable literature on the significance for accountants of their being accepted as a profession. The claim that they have regard to ‘the public interest’ in their activities is a central feature of the accountancy bodies’ claims to being accepted as a ‘profession’. This, they argue, distinguishes them from trade associations and trade unions. The claim is significant for both their economic and symbolic value. This paper examines the accountancy bodies’ claims by examining their responses to the 1992 publication of a discussion document The Future of Auditing by the Auditing Practices Board. Responses by four major professional bodies are analysed in detail. It is concluded that most of them do not attempt to redeem the claim to have regard to the public interest. Instead, they are mainly concerned to promote their members' private interests, frequently by advocating policy measures that will advance their own members' interests at the expense of those of other accountancy bodies. The significance of the contradiction between the transparency of this advocacy and the considerable effort expended in claiming to act in the public interest is discussed.     

More than ‘continuing professional development’: a proposed new learning framework for professional accountants

This paper explores literature relating to continuing professional development (CPD) and lifelong learning to develop an understanding of how the learning landscape has evolved in recent years, both in the accountancy profession and more widely. Three different perspectives on learning are drawn together and this synthesis is used to develop a framework for professional learning. In this, the concepts of CPD and lifelong learning are replaced with ‘learning relating to professional competence’ and ‘learning relating to career adaptability’. The framework also contrasts the learning of an ‘informed professional’, a ‘competent professional’ and a ‘complete professional’. This holistic model, derived from existing literature, will be of interest to professional accountancy bodies and educators of accountants and will inform their ongoing interactions with current and future professional accountants.     

Benign sacerdotalist or pious assailant. The rise of the professional accountant in British management

Matthews et al.'s The Priesthood of Industry [Matthews, D., Anderson, M., & Edwards, J.R. (1998). The preisthood of industry. The rise of the professional accountant in British management. Oxford: Oxford University Press] charts the encroachment of professional accountants into the realms of management in Britain. It is suggested in this review essay that the brand of economic determinism employed by the authors offers a partial explanation for that fundamental occupational shift. The functionalist and evolutionary foundation of Matthews et al.'s analysis invite a more critical interpretation of the accountants' stratagem. A reading of The Priesthood of Industry also indicates several issues which require the attention of accounting historians. Among these are the shifting character of the professional ideology; responses to entrepeneurialism; the social derivation of professionals; the manner of jurisdictional capture; a fuller understanding of the inter-war climacteric; and the contribution or otherwise of accountants to British economic decline.     

‘All sorts and conditions of men’: The social origins of the founders of the ICAEW

The early organisation of accountants in Scotland during the 1850s and 1860s has excited the intellectual curiosity and research endeavour of a number of students of professionalisation. By contrast, until recently there was a dearth of academic interest in institutional developments in England and Wales during the 1870s and 1880s. Yet, organisations such as the Institute of Chartered Accountants in England and Wales (ICAEW) which emanate from this period soon became the most significant players on the British professional scene and were to exert considerable influence on the development of accountancy institutions and professional ideologies in several locations. Exploiting a variety of genealogical sources this paper seeks to fill a void in the literature by analysing the social origins of the founding members of the principal professional association in England and Wales. It provides evidence of early chartered accountancy as a destination for long distance, upwardly mobile males, both intergenerationally and intragenerationally. The rate of self-recruitment among the founders of the ICAEW is shown to be low. The proportion of founders deriving from the upper and upper-middle classes is revealed to have been markedly less than that of their Scottish counterparts. The paper contributes to understandings of the complex professionalisation of British accountants, the extent of social mobility in Victorian Britain, the pathways to social advance in a class-based society, and illuminates the social complexion of one of the ‘new’ professions which emerged during the nineteenth century.     

Software section

Abstract

In this study, first year commerce students in Australia were surveyed about their perceptions of their accounting studies and their perceptions of the attributes required of professional accountants. The paper specifically addresses the factors important in determining whether first year students intend to become accountants. The study uses a logistic regression model incorporating demographic and academic factors, as well as students' perceptions of the work of accountants, to predict intention to become an accountant. The results show that the perception of importance of generic skills, intrinsic interest in the discipline area, and course satisfaction were significant in determining intention to pursue a career as an accountant. As many students formed their judgments about the work of accountants from their accounting studies, the findings have implications for accounting educators in terms of the enthusiasm and motivation required in teaching accounting, as well as curriculum development that reflects the skill set required for an increasingly sophisticated business environment.     

American Accountants in 1880

Although much has been written about the foundation and maturation of the early US public accountancy profession, little is known about the community of American accountants that existed prior to the main foundational events of the 1880s and 1890s. Using data extracted from the 1880 US Census, this study provides a contextualised review of American accountants in that year. Contextual factors include the population and manufacturing economy of the US in 1880, and other accounting service providers such as auditors and bookkeepers. The study reveals a very small community of accountants relative to the US population and manufacturing economy, occupational and economic distinctions between accountants, auditors and bookkeepers, little evidence of public accountancy as a significant occupation, the presence of a small female subset of the accountant community, and a significant proportion of accountants associated with lower socio-economic classifications and immigration. The evidence of the study is consistent with contemporary comments recorded by British public accountants and American bookkeepers.     

Professional accountants and the development of a management accounting service for the small firm: barriers and possibilities

This paper reports the results of a qualitative study examining the potential for the provision of a management accounting service for smaller companies by accountants in professional practice. The study aimed to determine the management information needs of owner-managers, the type and frequency of information preferred and the capacity of professional accountants to contribute to these needs. The owner-managers of 15 smaller companies were asked to participate in semi-strucutured interviews during which their use of computers to provide management accounts, their relationship with their accountant and their financial skills were discussed. The respondents were presented with a range of management information including statutory final accounts, interim accounts, cash statements, ratios and graphical comparisons of monthly turnover figures in order to assess their financial information skills and needs. The study found that companies used computers for the preparation of management accounting information, but usually not to their full potential. The financial awareness of owner-managers varied considerably. There was a favourable response to the presentation of ratios and graphs, however, it was felt that an explanation or interpretation of financial information by their accountant would be a useful addition to improve their understanding and therefore aid their business. The study concludes that there appears to be significant potential for accountants to expand the management accounting services they provide to smaller companies, especially where information is presented as ratios or graphs and accompanied with an appropriate narrative interpretation. This would also increase the financial skills of their clients and result in an increased demand for management accounting services.     

CAP Forum on Enron: Professional Insecurity and the Erosion of Accountancy's Jurisdictional Boundaries*

This study examines attitudes about professionalism in accounting shortly before the debacles of Enron and Andersen. Interviews with experienced Canadian chartered accountants (CAs) conducted mostly in late 2000 and early 2001 indicate significant doubts about the notion of auditor independence and a relatively high degree of uncertainty about the future of the profession. Accountants also expressed significant difficulties in describing the basic features of what it means to be a professional accountant. On the basis of these observations, we introduce and detail the construct of “professional insecurity". Relying on Giddens's theoretical developments on the role of trust and systems of expertise in today's society, we reflect on the significance and implications of the professional insecurity of CAs, particularly its impact on accountancy's ability to hold on to its jurisdictional boundaries. Our thesis is that the difficulties that accountants experienced in their day‐today lives in sustaining a coherent sense of self‐identity were particularly stressful to them given people's fundamental need for coherence, and this significantly affected the capacity of their profession to hold jurisdiction.