Professional reconstruction: The co-ordination of the accountancy bodies 1930-1957

Accounting History,  Nov 1998  by Potter, Brad

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Professional reconstruction: the co-ordination of the accountancy bodies 1930 1957

Ken Shackleton and Stephen P. Walker: Institute of Chartered Accountants of Scotland, 1998.

This publication comes as a result of a wider investigation into the organisation and maturation of the British Accountancy Profession in the twentieth century. As a direct consequence of the British Accountancy profession not having obtained regulation by the state through registration, the early twentieth century saw a proliferation of accountancy bodies in the UK, such that by 1930, there were at least 17 in existence. This seemed at odds with the increasing internationalisation of business and there came increasing calls for the profession to "speak with one voice". How sectors of the British Accountancy profession sought to answer these calls provides the major impetus for this study.

In the opening pages, the authors provide justification for their selection of the period of study. The study is bounded by the Goschen Enquiry of 1930, which addressed the formal registration of the profession, and 1957, the year in which the Society of Incorporated Accountants and Auditors integrated with the chartered societies at a federal level, constituting a major realignment of the profession. The authors argue that while the merger attempts during this period (and in fact since 1957) have proved unsuccessful, it was the outcome of the co-ordination movement in the 1940-1950s which substantially shaped many institutional structures existing to the present day.

A major part of this study is concerned with the period 1942-1951. During this time, the accountancy profession endeavoured to promote the Public Accountants Bill, which outlined the proposed manner in which the organisation of the profession should proceed. Several accountancy bodies actively pursuing the state registration of the profession already possessed the elusive and keenly sought after Royal Charter. The authors contend that while a Royal Charter "undoubtedly enhanced the professional status of members", it neither conferred a complete monopoly of professional practice nor prevented the formulation of other organisations of accountants. The authors offer this as a central reason why such bodies continued to pursue closure of the profession via state registration, and this study provides a valuable contribution to existing literature in this regard.

Chapters 2-4 provide the setting for the rest of the study. In Chapter 2, the authors place the attempts at co-ordination of the accountancy profession in the context of the socio-economic and political changes that took place during the Second World War and the post-war reconstruction period. Occupational groups such as accountants, were enlisted by government to assist in the wartime policy development and implementation, and opportunities existed for these groups to participate in creating better conditions for society in the post-war period. The authors argue in this study that the extent of participation by the accountancy profession in the postwar reconstruction period was limited by the fractured nature of its organisation, and this provided the major incentive to pursue co-ordination vigorously.

Chapter 3 explores the formation of the Co-ordinating Committee, the first formal accountancy institution created to consider the co-ordination of the accountancy profession. Formed in 1942, with representatives from several of the larger accountancy bodies in the UK, the Co-ordinating Committee had, by the end of 1942, drafted a scheme outlining the proposed future of the accountancy profession. The UK accounting bodies did not unanimously receive the proposals contained in the first draft of the scheme, and many began to question the motives of those responsible for the proposals. This marked a period of conflicts and compromises for the UK accountancy bodies, where the proposals were re-drafted several times. Chapters 5-7 document this period.

While the preparation of an agreed "Public Accountants' Bill" indicated some progress in the organisation of the UK accountancy profession, the protracted nature of the discussion meant that much of the early momentum behind the coordination movement had been lost by the mid 1940s. In addition, the war had ended, the political climate had altered, and the focus of attention of government turned to the much larger issue of the restructure of the companies legislation. The implications of this for the co-ordination movement, and the complex nature of the relationship between the accountancy profession and government in the late 1940s is documented in chapters 8-9. By 1950, general support for the "Public Accountants' Bill" was withdrawn, signaling the failure of the Co-ordinating Committee to achieve one of its major objectives - the unification of the profession. The authors argue that despite this, the activities of the Co-ordinating Committee did result in some tangible outcomes for the structure of the accounting profession, which are explained in the concluding chapter.