Constructing the governable small practitioner: The changing nature of professional bodies

Description
This article aims at contributing to the sociology of the accountancy profession by analysing how professional organisations
govern the various categories that have emerged in the professional body throughout its history. To this end, the
attempt by the Institute of Chartered Accountants in England and Wales to give an institutional existence to the category
of ‘‘the small practitioner” is examined. The plasticity and the polysemic nature of the notion of smallness, which refers
simultaneously to physical (small/big), geographical (local/global) and moral (anonymous/notorious) characteristics,
offers a particular opportunity to show how these three dimensions have been integrated into evolving organisational
arrangements and discourses aimed at legitimising the professional order. It is contended that the definition of what small
practitioners are, and how they should be dealt with, can only be understood as part of the broader issue of governance of
the accountancy community and the nature of the professional body.

Constructing the governable small practitioner: The changing
nature of professional bodies and the management of
professional accountants’ identities in the UK
Carlos Ramirez
*
De´ partement Comptabilite´ -Controˆle, HEC School of Management, 1, rue de la libe´ ration, 78351 Jouy en Josas Cedex, France
Abstract
This article aims at contributing to the sociology of the accountancy profession by analysing how professional organ-
isations govern the various categories that have emerged in the professional body throughout its history. To this end, the
attempt by the Institute of Chartered Accountants in England and Wales to give an institutional existence to the category
of ‘‘the small practitioner” is examined. The plasticity and the polysemic nature of the notion of smallness, which refers
simultaneously to physical (small/big), geographical (local/global) and moral (anonymous/notorious) characteristics,
o?ers a particular opportunity to show how these three dimensions have been integrated into evolving organisational
arrangements and discourses aimed at legitimising the professional order. It is contended that the de?nition of what small
practitioners are, and how they should be dealt with, can only be understood as part of the broader issue of governance of
the accountancy community and the nature of the professional body. The ICAEW’s e?orts to problematise the nature of
small practices indicates a will to integrate distant modalities of accounting expertise into a single professional space, so as
to prevent the physical and geographical distance between big and small ?rms from becoming too conspicuous a hierar-
chical distinction, and thus preserve the ideal of the community of peers upon which professional bodies have been built.
Ó 2008 Elsevier Ltd. All rights reserved.
‘‘There is no doubt that one of this board’s biggest
problems is to reach a large number of members in
practice who do not know what services are avail-
able to them. Constantly we receive comments such
as ‘‘if only I had known that this level of help was
available, I could have saved so much time and
e?ort”. Ignorance leads to the myth that the Insti-
tute does not understand the practitioners, and
does nothing to assist them. It is this kind of myth
that leads to calls for constitutional reviews, when
the root problem is not the constitution itself, but a
lack of communication between the Institute and
its members”.
1
Introduction
In comparison with investigations into the polit-
ical functions of professional bodies that deal with
the public promotion of professionals’ interests,
0361-3682/$ - see front matter Ó 2008 Elsevier Ltd. All rights reserved.
doi:10.1016/j.aos.2008.05.004
*
Tel.: +33 1 39677221; fax: +33 1 39677086.
E-mail address: [email protected]
1
General Practitioner Board, minutes of the 26 September
1996 meeting, p. 3.
Available online at www.sciencedirect.com
Accounting, Organizations and Society 34 (2009) 381–408
www.elsevier.com/locate/aos
studies that actually touch on aspects related to
internal a?airs and, more precisely, the governance
of the professional community are rarer (Green-
wood, Suddaby, & Hinings, 2002, p. 58).
2
As far
as accountants are concerned, Willmott, Cooper,
and Puxty (1993, p. 69) could validly claim that
‘‘governance has generally been treated as a black
box that provides a ready-made context or channel
for processes of occupational closure and account-
ing regulation”. The few studies on professional
institute governance that do exist essentially con-
cern the regulation of professional practice (Sud-
daby, Cooper, & Greenwood, 2007).
3
In contrast,
the operation of mechanisms intended to represent
the membership of professional bodies and foster
participation in institutional life have hardly been
addressed at all (Halliday, 1987; Powell, 1989; Van
Hoy, 1993).
This is all the more surprising as detailed exami-
nation of these mechanisms overlaps with another
research agenda which was assigned to scholars as
early as 1961 by Bucher and Strauss (1961), but
which, according to Freidson (2001, p. 58), has
tended to be neglected: intra-professional segmenta-
tion. Professions can be considered to be comprised
of ‘‘segments in movement” (Bucher & Strauss,
1961, pp. 332–333), which might correspond to spe-
cialisations resulting from the division of profes-
sional labour, but from a collective action
perspective more broadly represent the instrument
of recognition of any speci?c form of professional
identity (Bucher & Strauss, 1961). The vision of pro-
fessions as ‘‘loose amalgamations of segments pur-
suing di?erent objectives in di?erent manners and
more or less delicately held together under a com-
mon name at a particular period in history” (Bucher
& Strauss, 1961, p. 326) thus goes against concep-
tions that either posit that a shared identity and
common interests override the heterogeneity of the
membership or, on the contrary, see the member-
ship as dominated by one particular segment and
generally de?ne the remainder of this membership
in terms of what the dominants are not.
In the case of the legal profession, detailed atten-
tion has been paid to the representation of members
by authors such as Halliday (1987), Van Hoy
(1993), Heinz and Laumann (1994). Halliday, for
instance, has looked at the strategies deployed by
institutional leaders to limit or control demands
made by constituents. Van Hoy argues that the like-
lihood that intra-professional politics will sti?e pro-
fessional associations on important issues depends
on the scope of the issues concerned. Issues related
to professional regulations that a?ect every profes-
sional practitioner might create more problems than
issues of professional in?uence in public and gov-
ernmental arenas (Van Hoy, 1993, pp. 90–91). Nev-
ertheless, the study of the representation of sectional
interests should not be limited to those discrete
events that provide an arena for expression of di?er-
ent views on what the profession ought to be. Gov-
erning also involves creating the instruments
necessary for continuous categorisation of things
and beings (Foucault, 1979; Brian, 1994), be they
of a numerical (Desrosie`res, 1993) or simply func-
tional nature. Social categorisation, or ‘‘making
the social world ?t into categories” (Desrosie`res &
The´venot, 2000, p. 34) encompasses the three mean-
ings – cognitive, statistical and political – of the
underlying operation of representing. The elabora-
tion of ‘‘a mental image which we also use in every-
day life to identify ourselves and to identify those
with whom we interact” (Desrosie`res & The´venot,
2000), the production of statistics on social or natu-
ral phenomena, and the processes at work in the
construction of a group’s collective identity are
not necessarily simultaneous; nevertheless they have
in common the power to ‘‘equate” [mettre en e´ quiva-
2
Authors such as Freidson (1986) and Halliday (1987) bring to
the fore the political nature of professional institutes, not only
because of their lobbying in defence of their members’ interests
but also because in countries where professions enjoy a large
degree of self-regulation, they also participate as collective actors
in the rationalisation and regulation of vast, important domains
of social life. As ‘‘professional associations are formed and
developed within relations of power that they seek to shape as
well as exploit” (Willmott, 1986, p. 7), their natural inclination is
to reinforce ‘‘professional power” (Freidson, 1986) by expanding
their jurisdiction over expertise (Abbott, 1988). In the case of the
accountancy profession, the mechanisms by which these associ-
ations seek to extend the domain of practice have for instance
been recently explored by Covaleski, Dirsmith, and Rittenberg
(2003) and by Fogarty, Radcli?e, and Campbell (2006). Along-
side these attempts to extend their jurisdiction, professional
bodies often play a proactive role in spreading the belief that the
resulting social closure bene?ts the general interest (Sikka &
Willmott, 1995).
3
In the case of accountancy, see for instance Bedard (2001) on
the enforcement of disciplinary procedures or Radcli?e, Cooper,
and Robson (1994) on the consequences for the British profession
of the introduction of the 1986 Financial Services Act’s provi-
sions on the monitoring of professional practices. This article will
return later to the implications of the 1986 Act and the 1989
Companies Act (regulating the registration and control of
auditors’ work in the UK) for governance of professionals.
382 C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408
lence] individuals (Desrosie`res & The´venot, 2000, p.
35).
4
These individuals then become ‘‘commensura-
ble”, that is to say they can be measured within a
single space and identi?ed by the use of common
notions (Espeland & Stevens, 1998).
In this paper, representation of professional cat-
egories will be considered to be determined ?rst
and foremost by the problem of de?ning the identity
of the people the category is to encompass. This is
not a straightforward operation, not only because
various de?nitions may con?ict but also because it
involves a process that can be de?ned as a ‘‘prob-
lematisation” process (Callon, 1980; Latour, 1987;
Miller, 1991; Robson, 1994), meaning that the iden-
tity of a segment of the professional community
does not necessarily refer to something existing per
se but primarily to the broader problem of main-
taining the commensurability of the professional
community. Scrutiny of the establishment and
modus operandi of the administrative instruments
necessary for representation of sectional interests
must therefore take into account contextual ele-
ments that a?ect the nature of the professional body
itself.
The capacity to represent is essential in de?ning
an individual or an institution as what Latour and
Callon call a ‘‘macro-actor” (Latour & Callon,
1981). Macro-actors are able to ‘‘translate” other
actors’ identities and actions into their own terms.
The meaning of ‘‘translation” here is that given by
Callon and Latour in their article on the ‘‘Big
Leviathan” (Latour & Callon, 1981): ‘‘all the nego-
tiations, intrigues, calculations, acts of persuasion
and violence thanks to which an actor or force takes
or causes to be conferred on itself authority to speak
or act on behalf of another actor or force” (Latour
& Callon, 1981, p. 279). The establishment of polit-
ical legitimacy is part of this translation process by
which macro-actors are built and ‘‘grow” with the
elements that are accumulated (and made unchal-
lengeable) in them. The next three sections of this
article examine in detail the e?orts deployed by
the Institute of Chartered Accountants in England
and Wales (ICAEW) to remain a macro-actor, that
is to say an actor endowed with the ability to speak
on behalf of its members. Such an ability implies
translating what those members are into terms com-
patible with the nature of the professional body. As
this nature evolves over time, so does the process of
translation.
A consistent body of literature already exists on
the ICAEW. Ranging from in-house histories
(Howitt, 1984) to more critical enquiries (Robson,
Willmott, Cooper, & Puxty, 1994), this literature
has mainly tackled aspects pertaining to the rela-
tions between the Institute and other social actors,
and the profession’s in?uence in public and govern-
mental arenas (Radcli?e et al., 1994; Robson et al.,
1994; Walker & Shackleton, 1995, 1998; Cooper,
Puxty, Robson, & Willmott, 1996).
5
Although the
aforementioned publications – especially Radcli?e
et al. and Willmott et al. – consider the issue of gov-
erning professionals, there is still a dearth of
archive-based studies on the governance of the
ICAEW in the period after 1970, and the present
article aims to redress the balance. This is all the
more necessary in view of the issue of Institute gov-
ernance, as in the past 35 years the body of profes-
sionals registered with the ICAEW has changed
dramatically, moving towards a greater variety
and fragmentation of the chartered accountant’s
identity. The Institute itself has seen its role and
ways of operating change drastically with develop-
ments in auditing and ?nancial services regulation
(Hopwood, Page, & Turley, 1990; Radcli?e et al.,
1994; Cooper et al., 1996). The number of full-time
employees, and the number and attributions of its
departments, committees and directorates have
evolved to cope with these exogenous constraints
(ICAEW, 1997).
6
The ICAEW is an increasingly complex adminis-
tration, but it must also be considered as a political
body, which has been undergoing a complex process
of constitutional revision for the last twenty-?ve
years.
7
The conception of the ICAEW as a political
4
Translations from Desrosie`res and The´venot (2000) are our
own.
5
These references will be exploited throughout the article.
Other works include the aforementioned article by Willmott
(1986) on the sociological history of the di?erent bodies of the
UK profession, the competition between them and the economic
and political contexts of their emergence, merger and failed
merger plans; Sikka, Willmott, and Lowe (1989) on the produc-
tion by these bodies of an ideology of accountability and public
service; Sikka and Willmott (1995).
6
In 1996 the Gerrard report counted no less than 143
committees, directorates, faculties and working parties operating
within the Institute.
7
The Tricker (Tricker, 1983) and Worsley (Worsley, 1985)
reports were entitled ‘‘Governing the Institute”. In 1996, the
Council asked Peter Gerrard, a barrister, ‘‘to conduct an
independent review of the Institute’s constitutional arrange-
ments” (Gerrard, 1996, p. 1).
C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408 383
body has constantly and quite naturally been asso-
ciated with the need to make it a representative
body. It is interesting to compare the statement used
as an epigraph to this paper with the following
statement made in 1968:
Any organisation which has a democratic struc-
ture needs e?ective, active lines of communica-
tion among its members and between members
and management if it is to function properly.
The Institute is such an organisation. Its manage-
ment is elected from and by the membership. Its
written constitution can normally be altered only
by the membership.
8
Although Bye-Law 33 gives members the right to
vote in constituency elections for Council Members
and stipulates that any member of the Institute is
eligible to serve on its committees, participation in
the Institute’s a?airs has been traditionally low.
The re?ection on the nature of the link between
the Institute and its members has been, therefore,
consistently carried out in conjunction with actual
attempts to construct this link. In other words,
member representation, in the statistical and cogni-
tive meanings of the word ‘‘represent”, has always
been associated with their political representation
(i.e. in this case, the mechanisms that ensure that
the voice of the members is heard and that their
needs and aspirations are catered for).
The operations to produce commensurability are
vital in preserving the integrity of the professional
body. These operations require member representa-
tion that can simultaneously encompass the whole
distance between the centre and the periphery of
the Institute, and between the di?erent modalities
of being a professional accountant. Due to the
simultaneity of the various operations involved in
preserving the commensurability of members, their
representation as a collective category has been
heavily dependent on the vicissitudes of the process
to establish such representation, which in turn has
been a?ected by contextual elements as diverse as
the growth of the Big 10, 8, 6, 5 and then 4 ?rms,
the introduction of auditing standards, and the
greater number of graduate entrants to the profes-
sion. Member representation thus requires a perma-
nent process for integration of these di?erent
elements by the Institute, in order to retain the
capacity to represent.
To illustrate this process, the small practitioner
category is the selected category whose representa-
tion will be analysed. The reasons for this choice
are manifold. First of all, they lie in the particular
position of the smaller ?rms in the conceptualisa-
tion of the link between Institute and membership.
There exist of course other categories within this
membership. Probably as much time and resources
are devoted to building links with members in
industrial and commercial environments or younger
members, as for small practitioners.
9
And yet small
practitioners have long formed the bulk of ICAEW
membership (Matthews, Anderson, & Edwards,
1998). Small practitioners are contentious and often
thwart or jeopardise plans to reform the Institute,
forcing it into exercises of constitutional revision
and self-criticism. Small practitioners are among
those members who are particularly proud of being
chartered accountants and will not hesitate to
oppose any attempt to modify the characteristics
of a quali?cation they have sometimes fought hard
to obtain.
10
Opposition to mergers with other insti-
tutes is thus traditional (Howitt, 1984; Walker &
Shackleton, 1995, 1998). For instance, in 1996, an
extraordinary general meeting was called on the ini-
tiative of a small practitioner from Liverpool to
contest a proposal to include a greater degree of
specialisation in the training of chartered accoun-
tants.
11
The category of the small practitioner (in
its di?erent acceptations, de?nitions and descrip-
tions) o?ers interesting properties that derive from
the polysemic nature of the word ‘‘small”, which
encapsulates physical (big/small ?rms), geographi-
cal (global/local practitioners) and moral (well-
known/anonymous members) dimensions. As will
be shown in the remainder of the article, this polyse-
mic nature complicates the task of representing
8
Report of District Societies Committee to Council on
communications in the Institute. Appended to the 8 January
1969 meeting of the Council minutes.
9
On this point see Howitt (1984, pp. 102–109) and Noguchi
and Edwards (2004), who describe the development of the
ICAEW’s Taxation and Financial Relations Committee as a
means to encourage participation by members employed in
industry and commerce in the Institute’s management.
10
In the case of small practitioners, the Chartered Accountant
quali?cation is all the more important since it is very often their
only quali?cation and the only dimension of their professional
identity (as opposed to members employed in industry, commerce
or the public services who also ‘‘belong” to the organisations for
which they work).
11
‘‘English ICA faces EGM over examination plans”, Accoun-
tancy Age, 12 October 1995, p. 1.
384 C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408
small practitioners but also, paradoxically enough,
supplies resources for new de?nitions of their iden-
tity that are compatible with the nature of the pro-
fessional body.
The main reason for the choice of the small prac-
titioner as the focal category, however, is the inten-
tion to examine one of the essential characteristics
of the ICAEW’s practising membership. At the
beginning of the 20
th
century, small ?rms were the
norm (Matthews et al., 1998) and up until the end
of the 1960s a sort of continuum existed between
small and bigger ?rms, not least because the number
of partners per ?rm was capped (the limit of 20 part-
ners applicable since 1862 was lifted by the 1967
Companies Act). Of course, the professional elites
located in London’s ‘‘Square Mile” and belonging
to international networks could already be consid-
ered very distant from the high-street practitioner,
but the situation at the time probably bore little
resemblance to nowadays, when the ICAEW com-
prises both local professionals and transnational
actors in ‘‘the Big 4” cluster. The transnational
actors’ commitment to the rest of the chartered
accountants in England and Wales and to their
Institute appears to have weakened (Cooper & Rob-
son, 2006; Suddaby et al., 2007) as they have gained
more prominence on the market for professional
services to large companies and in national and
international standard-setting organisations. Unlike
the bigger ?rms, who need no representation as they
can ‘‘speak for themselves” and convey images of
what they are and do to large audiences, the small
practitioner needs a ‘‘macro-actor” (a professional
Institute or a stand-alone association) to do so.
12
In the case of the ICAEW, as already observed, this
representation is determined by the need to accom-
modate diverging conceptions of professionalism
within the same community. The size-based polari-
sation of the spectrum of ?rms between big and
small ?rms is thus an essential element in the pro-
cess of representing the small practitioner. As the
distance between big and small ?rms has grown,
representation has proven more complex, especially
since the Institute has been endowed with new reg-
ulatory functions (see below). This also explains
why the ICAEW has been selected to examine the
problems of representing the small practitioner.
Another British professional body, the ACCA
(Association of Chartered Certi?ed Accountants),
might have appeared a more appropriate choice,
since its practising membership is essentially made
up of small ?rms and sole practitioners. But it is pre-
cisely because the ACCA is mostly an institute of
small practitioners that its process of membership
representation and the various operations involved
in that process are substantially di?erent from those
of the ICAEW.
13
The fact that the ICAEW mem-
bership includes both big and small ?rms is what
makes the task of accommodating di?erent ways
of being a practising chartered accountant, within
the same institutional boundaries, an issue.
The following three sections are devoted to the
history of this issue from the 1960s up until the
end of the 1990s, showing how the move from the
desire to represent small practitioners and encour-
age their participation in the Institute’s a?airs to
the need to e?ectively govern them was operationa-
lised. The operations necessary to achieve represen-
tation of small practitioners vary in substance with
the evolution over time of the constraints placed
on the ICAEW. Three periods can be distinguished.
The ?rst runs until the beginning of the 1980s. At
that time, the plan to make the Institute ‘‘grow”
by integrating additional actors (the other account-
ing institutes) was still top of the agenda. Nonethe-
less, other issues began to be considered: growth of
the top ?rms in the profession, creation of standard-
setting bodies separate from the professional insti-
tutes, a dearth of trainee recruitment in the smaller
?rms. The second period essentially covers the
1980s. In this period, constraints that arose in the
preceding period received institutional translation.
The 1980s were the era of in-depth re?ection on
the constitutional nature of the Institute, which con-
cluded that it was impossible to represent the com-
munity of chartered accountants with a single
category, and that there was a need to accommo-
date the community’s heterogeneity. Finally, the
1990s saw the Institute become a regulatory body.
The Institute now needed to e?ectively govern its
small practitioners, and as shown in the last section,
12
Which, as will be shown in the concluding part of the article,
does not mean that the Big 4 are ‘‘macro-actors” able to speak de
jure in the name of the profession, even though they are often its
de facto voice, especially in international arenas.
13
To the best of my knowledge, the issue of ‘‘the small
practitioner” has never been identi?ed as such by the ACCA,
although this does not mean it has no governance problems. The
crusade led by Prem Sikka for a more transparent and account-
able leadership is one example of the debates around the
governance of the ACCA. See ‘‘ACCA has o?ended all in the
profession”, Accountancy Age, 21 November 1996, p. 13.
C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408 385
this involved a need to rede?ne their identity. The
events, decisions, programmes, projects, committees
and individuals referred to have been allocated to
one of these periods by the author; naturally, their
in?uence and action overlap with other periods
and determine or are determined by the operations
of representation taking place in subsequent or ear-
lier periods in time. The paper ends with a brief dis-
cussion of the nature of the ICAEW as a
professional body, and proposes some directions
for further research.
The empirical material investigated in the paper
is primarily constituted by the administrative
records of the ICAEW between 1960 and 2000, to
which the author has bene?ted from unrestricted
access. Although the most recent of these records
would not qualify as proper ‘‘archives”, the same
techniques of historical investigation have been
applied in their treatment. The information
extracted from ICAEW records has been supple-
mented by the exploitation of the professional press
over the period 1970–2000 (The Accountancy and
Accountancy Age publications essentially) and, for
matters of clari?cation, by interviews with
ICAEW’s o?ce holders and leaders of ICAEW
practitioners associations, a list of whom appears
at the end of the paper.
Starting point: the small practitioner as a local
practitioner (1961–1983)
Before 1980, the idea of providing representation
for small practitioners was closely linked to the role
they had played in the two major consultations
which marked the life of the ICAEW after World
War II. The (successful) 1957 merger with the Soci-
ety of Incorporated Accountants and Auditors and
the failure in 1970 of the proposal (led by the
ICAEW) to constitute a fully registered profession
by merging its diverse bodies (Walker & Shackleton,
1998)
14
were heavily debated among the member-
ship (Howitt, 1984; Walker & Shackleton, 1995,
1998; Willmott, 1986). The demise of the 1970 pro-
ject was analysed as essentially due to the mobilisa-
tion of the rank-and-?le members of the English and
Welsh Institute (Walker & Shackleton, 1998; Will-
mott, 1986), who sought to protect their quali?ca-
tion for fear that it would be diluted if a larger
professional body was formed.
15
In an atmosphere
of intense re?ection on the ‘‘mega-merger” debacle,
the 1974 decision to set up a sub-committee of the
General Purposes and Finance Committee to
‘‘determine whether an enquiry into the problems
of the small practice is likely to lead to constructive
conclusions”
16
initially seems to have been driven by
the desire to ?nd out whether the 1970 episode was a
one-o? outburst, or rooted more deeply in an endur-
ing unrest.
17
In fact, the 1974 enquiry is reminiscent
of an earlier study of the state of small practices
commissioned in 1961 (Howitt, 1984, p. 135), a
few years after the ICAEW’s merger with the Soci-
ety of Incorporated Accountants and Auditors.
Both enquiries resulted in a problematisation of
small practitioners as ‘‘distant” citizens of the Insti-
tute. This distance, which was to become drama-
tised in the aftermath of the 1970 failure and lead
to introduction of instruments speci?cally devoted
to the representation of small ?rms, corresponds
to an era in the ICAEW’s history when the agenda
still concerned governance of the profession rather
than governance of the institute itself.
Sectional interests and the growth of the profession
before 1970
Until 1970 the ICAEW’s growth as a macro-
actor, i.e. an actor endowed with the capacity to
represent, seems to have been intimately associated
with its role in the evolution of the accountancy
profession in the UK. The history of this profession
went through an initial period (1853–1930) marked
by the proliferation of accountants’ associations,
as a result of boundary work aimed at excluding
unworthy competitors – who created rival associa-
tions – and the frustration of these associations’ var-
ious solo attempts to secure state registration
(Matthews et al., 1998; Walker & Shackleton,
1995). The existence of at least 17 bodies in 1930
and an unending internecine struggle (Walker &
Shackleton, 1995, p. 469) were not compatible with
the advancement of the whole profession. Increas-
ing State intervention in the British economy, espe-
14
See also the June (pp. 406–408 and 411–412), August (pp.
566–568), September (pp. 634–638) and October (pp. 694–697)
1970 issues of Accountancy.
15
See Accountancy, November 1970, pp. 756–757.
16
General Purposes and Finance Committee report to Council
appended to 7 July 1974 meeting of Council minutes.
17
Particularly as the 1970 vote, which ultimately rejected a
merger between the di?erent accounting bodies, had been
carefully prepared for and promoted by the Institute. See Walker
and Shackleton (1998).
386 C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408
cially during the war and the ensuing reconstruction
period, urged the di?erent professional associations
to ‘‘place national duty above petty snobbery”
(Walker & Shackleton, 1995, p. 476) and follow a
long and winding road to uni?cation. The creation
of a Coordinating Committee of Accountancy
Bodies in 1942 was followed by an attempt to intro-
duce a Public Accountants’ Bill in Parliament
(Walker & Shackleton, 1995; Willmott, 1986).
Although this was thwarted by opposition from
some government o?cials, the attempt demon-
strated the possibility of collective action on the part
of the leading professional associations.
18
Discus-
sions initiated at the Coordinating Committee in
the 1940s between representatives of the ICAEW
and the Society of Incorporated Accountants and
Auditors led to the two bodies merging in 1957.
During the following decade, a grandiose scheme
was engineered under the aegis of the ICAEW to
settle the issue of uni?cation of the profession once
and for all. It proposed a future two-tiered accoun-
tancy profession, protected by registration against
the possible creation of new bodies. Within the
new profession, members of the existing bodies
would either become chartered accountants or be
con?ned to the rank of ‘‘licentiate accountants”, a
lower grade of sta? engaged in the performance of
routine accounting functions. Registration was
again rejected, essentially, according to Walker
and Shackleton (1998), because the proposal was
put forward to the government in a period of
mounting hostility to monopolies. The merger of
the di?erent bodies into a wider structure also failed
to materialise after the proposal was rejected in an
ICAEW membership ballot.
Intra-organisational diversity played an impor-
tant role in this history of growth through
attempted absorption of other professional actors.
Of course, many of the moves for uni?cation of
the profession seem to have been driven by a desire
for greater social prominence and bargaining power
in negotiations with the State and the business com-
munity. However, at least in the case of the
ICAEW, such moves were also made for fear that
the coexistence of several accountancy bodies, com-
bined with new structural conditions a?ecting the
profession, could lead to the Institute’s demise by
disrupting its own integrity. The increase in the
demand for accountancy labour from the industrial
and commercial sector could have resulted in pro-
motion of the Institute of Cost and Works Accoun-
tants as the premier body of professional
accountants in industry (Walker & Shackleton,
1998). Similarly, a rise in the minimum quali?ca-
tions for entry to the ICAEW could have encour-
aged defection by many aspiring accountants from
the traditional backgrounds to less demanding
bodies, such as the Association of Certi?ed and
Corporate Accountants.
19
Anxiety about the
ICAEW becoming an elitist practitioner-only pro-
fessional association was probably all the more
pressing amongst its leadership, since the categories
concerned by the aforementioned structural changes
were precisely those that had been traditionally
under-represented at the Institute’s Council –
accountants working in industry and, possibly,
small practitioners (Howitt, 1984; Noguchi &
Edwards, 2004).
20
As for the small practitioners, Howitt (1984, pp.
28–30) reports that unease over the attitude of the
Institute’s Council, perceived to be in the hands of
too exclusive and privileged a circle of London
?rms, had existed from the beginning. In 1883 The
Accountant criticised the Council for taking ‘‘too
narrow and exclusive a view of the interests of the
profession as a whole and for being too afraid of
lowering the status of the profession to take ade-
quate account of the plight of the small men after
the loss of so much insolvency work” [after a ban
was set on advertising, especially for bankruptcy
services] (Howitt, 1984, p. 30). Of course, the most
spectacular demonstration of the ‘‘small men’s” dis-
content came with their frustration of the 1970 mer-
ger scheme. The apprehension that their cherished
professional quali?cation would be diluted if the
ICAEW was to merge with bodies perceived as
18
The Coordinating Committee of Accountancy Bodies was
used as a platform (through the participation of its members in an
Accountancy Advisory Committee) in negotiations with the
government on the auditor quali?cation clause of the 1948
Companies Act (Walker & Shackleton, 1995, pp. 482–484).
19
Raising the entry standards from ordinary (‘‘O”) level to
advanced (‘‘A”) level was advocated by a working party
commissioned by the ICAEW after the publication in 1963 of
the Robbins Committee report on Higher Education. This report
anticipated an explosion in the following two decades in awards
of scholastic quali?cations, and expansion of accounting pro-
grammes at universities, which could represent a threat to the
ICAEW’s own chartered accountant quali?cation (Walker &
Shackleton, 1998, p. 42).
20
One way to overcome the possible loss of candidates to the
ACCA was the constitution, as proposed, of a two-tiered
profession with di?erent entry standards.
C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408 387
inferior proved powerful enough to mobilise those
whose social status probably depended mostly on
this quali?cation.
21
The demise of the proposal to
amalgamate the di?erent professional bodies, and
the ‘‘aftertaste” that lingered throughout the 1970s
(Hopkins, 1980, p. 17 quoted in Walker & Shackl-
eton, 1998, p. 37) are important factors for under-
standing how the small practitioner identity
became problematised within the ICAEW.
Although small practitioners were not formally des-
ignated as the category that had frustrated the plans
of the Institute’s authorities, the 1970 debacle and
subsequent events did indeed contribute to drama-
tise a distance between the centre and the periphery
of the institute that had already been identi?ed as an
essential element in the representation of this cate-
gory. The process of problematising the small prac-
titioners did not start with the problems they
created in 1970. The re?ection that was conducted
throughout the 1960s on the future of the profession
had already provided an opportunity to inquire into
‘‘the problems and di?culties of the small
practitioner”.
The 1961 small practitioner enquiry and the role of
District Societies
On 10 October 1961 the President of the ICAEW
wrote to the president of each of the Institute’s dis-
trict societies
22
asking for their assistance in an
enquiry into the problems and di?culties of the
small practitioner.
23
As the President said in his let-
ter, a questionnaire would soon be distributed by
the district societies; this questionnaire, it was
thought, ‘‘covered most of the problems which the
small practitioner might wish the Council to exam-
ine and on which he might wish to propose reme-
dies”. Amongst the ‘‘many problems raised” were
those of ‘‘fees, competition, registration, publicity,
sta?ng, recruitment of articled clerks and relations
with the Inland Revenue and with other profes-
sions”. More than 70 meetings were organised by
the district societies on this topic and the returned
questionnaires represented the views of around
2000 practitioners.
24
According to the minutes of
the 3 July 1962 District Societies Committee meet-
ing ‘‘the submissions received exceeded 200 pages
in evidence and recommendations”. The problems
identi?ed by the small practitioners allowed the
Council to draw up a picture of small practice in
the ICAEW.
25
Small practitioners were unhappy
with competition from other professions (bankers,
solicitors) or from other members (requesting disci-
plinary action to be taken against members who
touted for insolvency work, or protection from large
?rms who were called in as specialists). They also
complained about the entry requirements (‘‘an
improvement will certainly not be achieved by low-
ering the standard of admission. It should if any-
thing be increased and the profession made to
look the place for only the brighter pupils”) or the
greater ability of large ?rms to attract articled
clerks.
26
But in general, they wanted more guidance
(especially technical guidance) from the Institute for
the conduct of their practice, and were willing to
participate in courses and events organised by the
district societies if given the opportunity to do so.
Apart from the question of the representativeness
of the opinion of a small cross-section of the whole
‘‘small” membership, what is essential here is to
note that the ICAEW district societies were central
in the organisation of the survey, and that the con-
clusions of the report especially advocated reinforc-
ing communication with members using the
contacts between the district societies and their
‘‘constituents”. The fact that no reference was made
to a de?nition of small ?rms by their size, as well as
21
Willmott (1986) also reports heated debates, fuelled by a
similar fear of social debasement, before the vote on the merger
with the Society of Incorporated Accountants and Auditors. In
the case of the rejection of the 1970 merger proposal, these
debates brought out deep-rooted intra-organisational divisions,
with the public expression of a hostile attitude to members
working in industry from some sectors of public practice
(Willmott, 1986, pp. 571–572).
22
There are now 22 District Societies forming the geographical
structure of the Institute. Historically they are not branches of the
Institute; in fact, some predate the ICAEW. They are autono-
mous bodies, each with its own president and committees. In
theory, district societies are responsible for their own ?nances and
membership structure.
23
The letter was printed in the 21 October 1961 issue of The
Accountant.
24
Minutes of the 2 January 1962 District Societies Committee
meeting.
25
Report of the District Societies Committee on the small
practitioner enquiry appended to the minutes of the 18 December
1962 meeting of the Council.
26
‘‘The result (of allowing members to have four articled clerks
each) is that most of the larger ?rms have in consequence taken
their full quota and these they have been able to acquire by
reason of their well known names and their ability to o?er better
?nancial inducements; the result has therefore been that the larger
?rms are recruiting the majority number and the best in quality of
the limited number of articled clerks available.”
388 C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408
rooting the representation process in the geograph-
ical structure of the Institute, helped to crystallise an
image of the small practitioner which was more
‘‘local” than ‘‘small”. Although the idea of
acknowledging the speci?city of small practitioners
and solving their problems was not carried fur-
ther,
27
the question of representing them remained
closely associated with a broader re?ection on the
territorial organisation of the ICAEW.
28
In 1968
the Council requested the District Societies Com-
mittee to draft a report on communications in the
Institute. In its conclusions, the report stressed the
lack of communications between members and their
institute. ‘‘The existence of a we and they attitude is
also a barrier to communication which needs to be
broken down and which can be broken down only
if members mix with one another and have good
opportunities to get to know the people who run
district societies and the members of the Council”.
It was thus recommended that the district societies
should maintain e?ective communication as one of
their fundamental purposes, especially with mem-
bers who do not normally participate actively, with
a special focus on members in industry and, in gen-
eral, small practitioners.
29
The association between
the re?ection on the role of district societies and
the re?ection on the small practitioner was to
become even closer after the failure of the 1970 mer-
ger proposals.
In its report for the 4 November 1970 meeting of
the Council, the District Societies Committee con-
sidered the failure of those proposals, with particu-
lar reference to ‘‘(a) the percentage of members who
did not vote and the probable failure of communica-
tions to this extent and (b) the future of district soci-
eties, their administration and ?nancing”. The
committee considered that every e?ort should con-
tinue to be made to communicate with those mem-
bers still not involved in the a?airs of the
Institute, and that in order to ensure that each dis-
trict society was in a position to provide the opti-
mum service to members, an equitable basis for
grants had to be found.
30
Therefore, at its meeting
of 3 March 1971 the Council resolved that a work-
ing party should be appointed to make recommen-
dations on the district societies’ organisation. The
resulting extensive report (known as the Cox
report)
31
suggested a complete re-orientation of
the role of district societies in the ICAEW electoral
process, turning these societies into constituencies
for the direct election of the Council (Cox report,
p. 17).
32
However, this change would not result in
a greater impression of ‘‘democratic rule” if the
need for ‘‘local democracy” was not fostered by
the district societies. It was thus recommended that
the formation of small branches and groups should
be encouraged wherever there appeared to be su?-
cient support. ‘‘Establishment of groups of ten;
more geographical and special interest groups”
was advocated. ‘‘Snowballs” to bring non-partici-
pating members into local activities and arrange-
ments for each sole practitioner to be contacted by
telephone or in person were also programmed. It
was further recommended that district societies
should be re-organised to operate under a federal
structure a?ording branches proportional represen-
tation upon their committees. Although it initially
followed the Cox report’s conclusions by looking
into greater local involvement for younger members
(through student societies), the Council eventually
also launched a new enquiry (minutes of the 7 July
1974 meeting) into small practitioners.
So far, the small practitioner had been mentioned
in the institutional discourse, but no decision had
been made concerning his speci?c nature. The small
practitioner and the local practitioner were still part
of the same problematics. The creation of the small
practitioner as a separate entity was to result from
the 1975 enquiry.
27
The Council decided to integrate the results of the small
practitioner enquiry into a larger consultation of the whole
practising membership centred on the problem of fees (see
minutes of the 5 February and 2 April 1963 meetings of the
Council). The results of the 1961 exercise were also incorporated
into the document The Future of the Profession,a report
commissioned in 1964 and described by Walker and Shackleton
(1998, p. 43) as part of the process of designing the 1970 merger
scheme.
28
Indications of this can be found as early as 1946 when the
question of automatic membership of district societies began to
come under consideration (minutes of the 5 March 1946 District
Societies Committee meeting).
29
Report of District Societies Committee to Council on
communications in the Institute. Appended to the 8 January
1969 meeting of the Council minutes.
30
District societies lost their ?nancial autonomy in 1964 when a
system of grants allocated by the Council was preferred. As
regards the November 1970 report to Council, it was noted that
‘‘it would be undesirable in the present climate to revert to local
subscriptions, which might in fact reduce even further the number
of members prepared to take an interest in their district societies”.
31
Appended to the minutes of the 30 November 1971 District
Societies Committee meeting.
32
This recommendation eventually went unheeded.
C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408 389
The 1975 enquiry and the creation of the small
Practitioner Advisory Committee
Unlike the 1961–1962 enquiry, the 1975 enquiry
was based on a much longer process of consultation
whose aim was ‘‘not only to establish what the
problems are but to ?nd out what, if any, solutions
some member ?rms have adopted and found e?ec-
tive – with the ultimate object of disseminating that
information at large”.
33
The consultation was con-
ducted under the aegis of the District Society Com-
mittee and the ad-hoc working party headed by
Harry Singer, a small practitioner who was later
to become President of the Institute. The conclu-
sions of the enquiry exercise were pessimistic. The
nature and length of the consultation (almost two
years) had brought to the fore several ‘‘structural”
characteristics of smaller ?rms.
‘‘A large majority (probably over 70%) of prac-
tising members belong to small ?rms. Many of them
feel that their place in the profession is inadequately
recognised, that they are not consulted on matters
which a?ect them and that an unfair emphasis is
placed by the Institute on matters which are of spe-
cial concern to large ?rms”.
34
Beyond this general
statement, the small practitioner enquiry report
detailed the various aspects that would form the
crux of ‘‘the small practitioner issue” for a good
number of years. In terms of partnership succes-
sions the working party accepted ‘‘the widely held
belief that certi?ed accountants may eventually take
over the smaller practice ?eld unless the importance
of the smaller practice is seen to be recognised by
the Institute and the training of students” (p. 3).
Regarding training of members and technical mat-
ters (p. 4) the report admitted that ‘‘while there
should be no reduction in accounting and auditing
standards, consideration should be given to di?eren-
tiating in future legislation between the require-
ments for stewardship in proprietary companies
and to the desirability of laying down a standard
form of quali?ed report for small companies whose
records do not comply with the requirements of the
Companies Act”. Also, ‘‘more publications and
courses speci?cally aimed at the smaller practitioner
should be provided”. The report further stated (p. 5)
that there were serious misunderstandings about
Council policy, in particular regarding the proposal
to turn the profession of chartered accountant into
a graduate profession.
35
‘‘The Council should make
a special, well publicised declaration that it wishes
smaller practitioners to continue training students
in the long term” (p. 4).
36
Many practitioners also
believed that a junior quali?cation should be pro-
vided for school-leavers who were looking for career
opportunities but were not up to chartered accoun-
tant student entry standard. The working party
therefore recommended that ‘‘urgent action should
be taken to decide whether an Institute of Account-
ing Sta? is to be supported or whether the Institute’s
own second tier body should be established” (p. 5).
In a way the interpretation of the results of the
1975 small practitioner enquiry, while contributing
to understanding of small practitioners’ di?culties,
also contributed to locking smaller members into a
series of representations focusing around the idea
that the Institute’s policies do not correspond to
small practices’ needs. In 1961 the small practitio-
ners ‘‘had problems”; in 1975 they were ‘‘a prob-
lem”, which was to become amenable to a whole
process of translation that would displace and rear-
range that problem’s di?erent dimensions in order
to enable the Institute to retain its capacity to repre-
sent small practitioners. For the time being, this
process was still fraught with the problematisation
of the link between the Institute and the small prac-
titioners in terms of spatial distance, indicating that
the solution to small practitioners’ problems lay in
better communication between the centre and its
peripheries. The small practitioner enquiry report
was especially insistent that ‘‘at district branch
and group level there are serious misunderstandings
and misgivings about Institute policy. The existing
communication links are undoubtedly inadequate”.
The essential recommendation for improving this
situation was to ‘‘establish a Smaller Practitioner
Advisory Committee (SPAC) for a trial period of
three years under the aegis and reporting through
the District Societies Committee. The SPAC should
consist of nominated Council members with a repre-
sentative from each district society who would
report back to smaller practitioner committees” (p.
3). The creation of the SPAC seems to indicate that
33
Minutes of the 4 December 1974 meeting of the Council.
34
Smaller Practitioner Enquiry working party interim report to
Council, p. 2. Appended to the minutes of the 3 December 1975
meeting of the Council.
35
This option was recommended by the Solomons report in
1972.
36
The introduction of a ‘‘training record” which substantially
broadened the scope of training was thought to be ‘‘largely
unrelated to the needs of small ?rms’ clients” (p. 4).
390 C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408
the small practitioner was thus problematised as
being di?erent from the local practitioner. But the
di?erent operations involved in this problematisa-
tion were still dependent on a centre/periphery
structure inherited from an earlier period, as analy-
sis of the operation of the SPAC proves.
The Small Practitioner Advisory Committee (1976–
1983)
The Small Practitioner Advisory Committee
(SPAC) held its ?rst meeting on 10 March 1976.
According to the terms of reference approved by
the ICAEW Council in its meeting of 3 December
1975, the SPAC would work under the supervision
of the District Societies Committee. Its role would
consist of making recommendations on ‘‘how best
to correct the misunderstandings disclosed in the
report and to provide better contacts so as to avoid
future misunderstandings”, and also ‘‘in what areas
can and should action be taken to overcome the gen-
uine and particular problems of smaller practitioners
and to develop proposals accordingly”. Apart from
the chairman, ‘‘a sole practitioner tending to special-
ise in management consultancy”,
37
its members ran
3-to-7 partner ?rms with much the same type of cli-
entele, consisting principally of smaller public com-
panies, smaller private ?rms, farmers, retailers.
38
The SPAC set up a very broad agenda, intended
to encompass everything perceived as potentially
problematic areas of practice, and four working
parties ((A) Relations between smaller practitio-
ners,
39
the Institute and district societies; (B)
Courses, o?ce administration and publications;
(C) Professional Standards and Ethics; (D) Sta?ng,
sta? training, student education training). Its aim
was also to overcome the smaller practitioners’ feel-
ing of isolation from the Institute by setting up a
two-way channel of communication.
In the early part of its existence, the SPAC thus
concentrated on performing a sort of ‘‘audit” of
the relations between small practitioners and other
parties in professional life, including the district
societies, the Institute’s committees (with special ref-
erence to the Education and Training committee),
and public agencies (the Department of Trade and
Industry, Customs and Excise, the Inland Revenue).
Potential competitors were also considered, in the
shape of banks but also other members of the Insti-
tute. For instance, a review was conducted of the
services provided to their local branches by the lar-
ger ?rms.
40
An example of the conclusions that were
reached concerning relations with the Inland Reve-
nue was as follows:
‘‘many of the problems arising were due to the low
standard of sta? employed by the Inland Revenue.
Many district societies arranged for discussion and
social activities with the local Inland Revenue o?-
cers. (Nevertheless) relations between the Institute
and Inland Revenue have improved immensely in
the last four years but it may be that smaller prac-
titioners are not always aware of progress that has
beenmade. The working party therefore decidedto
recommend to this smaller practitioner advisory
committee that digests on the subject should be
preparedfor smaller practitioner advisory commit-
tee members at appropriated intervals, also, there
should be a PR exercise to explain to smaller prac-
titioners what has been achieved in this ?eld and
quoting practical examples.”
41
The aim of the SPAC was not only to ‘‘know”
what was happening down below, but also to adver-
tise the fact that something was being done about it.
Particular emphasis was put on the role of the dis-
trict societies (after all, the SPAC was under their
supervision), which not only had to organise activi-
ties useful to their membership (such as courses),
37
Minutes of the 30 March 1976 SPAC Working party B
meeting.
38
Minutes of the 10 March 1976 meeting of the SPAC. It is
important to note that what exactly is considered to be a small
practitioner is very rarely stated in the archival material
consulted.
39
Professional standards, ethics, technical matters, o?ce orga-
nisation and administration, sta?ng, junior quali?cations, prof-
itability and fee levels, practice ?nance, indemnity insurance,
mergers, partnership succession, retirement bene?ts, consultancy
and referral, training of partners and senior sta?, courses, post-
qualifying education, publications, student education training
and recruitment, relations with (a) institute and district societies
(b) clients and the general public (c) other professions and
competitors, relations with government, Inland Revenue and
Customs and Excise. Minutes of the 10 March 1976 meeting of
the SPAC.
40
This was perceived as a continuation of the work that had
been carried out by the 1974 small practitioner enquiry. SPAC’s
Working party C initial task was explicitly to analyse the
conclusions of the report on the enquiry. (Minutes of the 7 April
1976 meeting of SPAC Working Party C).
41
Minutes of the 11 September 1978 meeting of the SPAC.
C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408 391
but also develop contacts and organise social activ-
ities.
42
Broader recommendations were also made.
For instance, steps were taken to ensure that the
public relations department would be asked to
announce in the appropriate professional press that
the ?rst meeting of the committee had taken place,
so that the maximum number of small practitioners
would be able to see that progress had been made.
In order to familiarise small practitioners with the
work of the institute committees and the problems
they deal with, the SPAC also decided that the edi-
tor of Accountancy should be asked to consider pro-
ducing an article explaining how they work,
possibly illustrated with case studies.
43
However, the limits of this top-down public rela-
tions exercise were revealed when the Institute expe-
rienced another setback: the failure to pass a motion
for compulsory current accounting at a special
meeting in July 1977. The ‘‘aftertaste” of the 1970
debacle still seemed to linger, and the SPAC consid-
ered whether anything new in the ?eld of communi-
cations with small practitioners could be learnt from
this further rejection by grass-root members of the
Council’s plans for the future of the profession.
Re?ecting on the 1977 episode, members of the
SPAC concluded that the voting had highlighted:
– the importance of small practitioner advisory
committee members doing all they could to
obtain the involvement of their constituents.
– the danger of putting a complex proposal before
the less sophisticated membership in one step. A
more gradual approach might have been more
successful.
– the need to educate members to appreciate that
they had a democratic system of elections to the
Council in which they should be persuaded to
participate.
44
Although the ‘‘need to educate members” was
emphasised, the SPAC re-oriented its activities. Its
new line of action focused much more on represent-
ing what was considered to be the small practitio-
ners’ views at the top levels of the Institute and
related agencies (the auditing and accounting stan-
dard-setting bodies created in the early 1970s) than
on actually attempting to make the SPAC a true
representative of small practitioners by establishing
grass-root contacts. The SPAC thus sought to
ensure that small practitioners were e?ectively rep-
resented at the Institute’s committees and director-
ates. It also suggested to the General Purpose and
Finance Committee, through the District Societies
Committee, that district societies should be asked
to maintain lists of small practitioners who were
able or willing to serve on institute committees
and sub-committees and had a particular back-
ground which quali?ed them to put forward the
small practitioners’ point of view on appropriate
problems.
45
Another aspect of the change in the
SPAC’s strategy was that much more time and
energy were devoted to a very detailed analysis of
the proposals drafted by the ICAEW executive or
by the auditing and accounting standard-setting
bodies, in order to determine their possible impact
for small practices.
46
At the end of this period in the history of the
Institute, there was still room for consensus between
the di?erent sizes of chartered accountancy ?rms.
Small practitioners were essentially distant practi-
tioners, whose voice needed to be carried across
the distance separating them from Moorgate Place
(the geographical centre of power in the ICAEW).
Various instruments (enquiries, speci?c committees,
persons designated as representative of the small
practitioner) were used to achieve operations of
interessment, enrolment and mobilisation. The rep-
resentation of the small practitioner was problema-
tised in terms of the centre and the periphery. The
dramatisation in the 1970s of the distance identi?ed
after the 1961 enquiry between local practitioners
and the administration of the ICAEW became an
essential element in the process of representing small
practices. As an examination of the next period in
the history of the Institute will show, a distance
between members (and, in the present case, ?rms)
themselves rather than between members and their
Institute was to develop, making it increasingly dif-
42
A list was provided which included dinners, conferences, one-
afternoon workshops on selected topics, etc.
43
Minutes of the 8 June 1976 meeting of the SPAC.
44
Report of the chairman of working party A to the Small
Practitioner Advisory Committee, 30 September 1977.
45
Minutes of the 17 December 1978 meeting of the SPAC.
46
See for instance the work of SPAC working party B on
simpli?ed ?nancial statements (2 December 1977) or on the
paper”Discussion drafts on auditing standards and guidelines” to
be submitted to the Audit practices Committee (11 September
1978), or on the Education and Training Directorate’s decisions
concerning the Association of Technicians in Finance and
Accounting.
392 C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408
?cult to see representation of small practitioners in
terms of centre and periphery.
From the small practitioner to the general
practitioner (1983–1990)
During the 1970s the accountancy profession had
to face a series of challenges that threatened the
capacity of its main bodies to maintain their pro-
claimed objectives of self-regulation in the defence
of the public interest. After the rejection of the pro-
posal to merge accountancy bodies in 1970, the pro-
fession su?ered a series of particularly high-pro?le
audit scandals (Willmott & Sikka, 1995) and the
apparent failure, also after the disclosure of major
scandals, of the auditing and accounting standard-
setting process that had started in the late 1960s,
(Robson et al., 1994). The threats to the privileges
of self-regulation that the whole profession was
enjoying in exchange for looking after the public
interest were actually concentrated on its elite, the
top ‘‘Big 8” ?rms, which were all members of the
ICAEW. While inter-?rm di?erences in terms of size
and fees were not too wide until the mid-1960s, a
growing gap had started to emerge between both
ends of the ICAEW’s practising membership.
47
The bigger ?rms’ increasing tendency towards
gigantism and their appetite for new recruits led to
a shortage of candidates to train in smaller ?rms,
which responded by recruiting and training certi?ed
accountants and accounting technicians, putting
their own identity as members of the ICAEW at
stake. The Institute had emanated from the ances-
tors of the current leading ?rms (Walker, 2004),
which had always been intimately associated with
its management (Willmott, 1986; Robson et al.,
1994). As close links with the ?nancial and political
establishment had also been developed, the major
?rms had come to represent the whole profession
(Hopwood et al., 1990). In particular, the major
?rms represented the profession at the Accounting
Standards Committee (ASC, later Accounting Stan-
dards Board) and the Audit Practices Committee
(APC, later Auditing Practices Board) which
drafted standards concerning the activity of all pro-
fessionals. Yet most of the criticism and disrepute
a?ecting the profession had originated in major
public scandals involving these Big ?rms (Sikka &
Willmott, 1995; Mitchell, Sikka, & Willmott,
1998).
As discussed earlier, the heterogeneity of the
ICAEW membership had already been an issue
for the de?nition of the role the Institute should
play in the governance of the accountancy profes-
sion. Strategies deployed to unify the di?erent pro-
fessional bodies had been partly motivated by the
fear of losing certain sections of the membership
– chie?y members working in industry and com-
merce – to rival associations. Heterogeneity, which
was now increasingly a?ecting the public practice
segment, that is to say the traditional point of ref-
erence of the chartered accountant identity,
became a central element in the re?ection on the
future of the ICAEW during the 1970s. The
agenda was no longer focused on growing by
absorbing other professional bodies, but on trying
to retain the capacity to represent, requiring de?ni-
tion of interests common to all members. The
interests would also have to coincide with objec-
tives assigned to the Institute itself which deter-
mine its relations with other social actors, such
as the State, the business community or the
remaining accountancy bodies. For the representa-
tion of the small practitioner, these changes in the
conceptualisation of ICAEW governance were to
have important consequences.
Managing heterogeneity: the ICAEW’s major
process of constitutional revision
As the Tricker and Worsley reports state in their
respective introductions, the major review of the
ICAEW’s institutional arrangements originated in
the realisation of increasing di?erentiation in mem-
bers’ interests and aspirations. Tricker (1983, p. 5)
says: ‘‘Inevitably, with the increasing complexity
47
In 1979, The Accountant published a study on the evolution of
the demography of audit ?rms, based on the Stock Exchange
Yearbook (Briston, 1979). Between 1928 and 1978 the number of
?rms selling audit services had risen from 3,880 to 8,711, while
the number of ?rms auditing listed companies had fallen from
2,014 to 511. This fall had mainly a?ected middle-sized practices.
For instance, there were 206 ?rms with between 3 and 20 listed
clients in 1968, but a mere 57 ten years later. By contrast, the
growth of the bigger ?rms on this segment of the market for
auditing services had been exponential during the 1970s. In 1958
the 20 largest ?rms audited 32% of the companies listed on the
London Stock Exchange, that is 2.3 points more than in 1928.
Between 1958 and 1968 the percentage rose by 7 points and in
1978 51% of the listed companies had a Big 8 ?rm as an auditor,
while 69% of these companies were serviced by the top 20 ?rms in
the profession.
C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408 393
of the subject and growing specialisation, there is
less homogeneity in interests across the member-
ship. The unanimity which was associated with a
shared set of expertise and common interests has
been lost. Members no longer have the same aspira-
tions in their professional quali?cation, nor the
same expectations of the Institute”. The Tricker
report was commissioned by the ICAEW Council
in 1982. It was followed in 1985 by the Worsley
report. Although the second report was intended
as an assessment of the main ?ndings of its forerun-
ner, it actually proposed very di?erent solutions for
the ‘‘governance problem” that had arisen in the
Institute (Robson et al., 1994).
Both reports came at a time when, according to
Willmott et al., ‘‘the capacity of the English Insti-
tute to uphold its end of the bargain with the state,
by e?ectively regulating the activities of its mem-
bers, had been increasingly placed in doubt” (Will-
mott et al., 1993, p. 72). Pressure on both the
profession and its clients for greater accountability
(Robson et al., 1994) and a recently elected conser-
vative government that frowned upon anti-compet-
itive activities (Cooper et al., 1996) are just two of
the circumstances which certainly incited the
ICAEW’s leadership to re?ect on the reforms that
would sooner or later bring changes to accountancy
bodies’ self-regulatory regime. But after the impor-
tant setbacks of the 1970 and 1977 ballots, the
capacity of the ICAEW to actively participate in
these reforms was in question. To secure member-
ship support, the Institute’s authorities had to
‘‘make interests coincide” (Willmott et al., 1993),
that is to say reconcile the professional association’s
identity as the protector of its members’ status with
its identity as defender of the public interest by vir-
tue of its Royal Charter. The two reports issued in
the ?rst half of the 1980s symbolise two solutions
to this di?cult equation. The Tricker report (1983)
provided an ‘‘outsider’s view” of the problem
(Tricker was an academic), based on the principle
that the solution was more participation in institu-
tional life, through a balanced representation of sec-
tional interests on the Council. In contrast to this
‘‘democratic” option, the ‘‘insider” Worsley report
(1985) (Jock Worsley became president of the Insti-
tute in 1988) took a ‘‘technocratic” view, aimed at
catering for the needs of each individual member
of the ICAEW and providing each with the means
of ‘‘improvement”.
The Tricker report focused on internal segmen-
tation of membership: in general, the members
employed in industry and commerce and the small
practitioners were reported to be suspicious and
resentful of an Institute perceived as o?ering them
little or no representation.
48
Tricker considered
seven principal options open to the professional
body to try to resolve the di?cult dilemma of rec-
ognising di?erent approaches to being a chartered
accountant without taking that recognition too
far. Of the seven options, Tricker considered three
to have favourable features: the representative gov-
erning body option, the executive direction option
and the divisionalisation option. All three options
provided a solution to the problem of the exercise
of power in the ICAEW, but only the third tried to
apply the idea through setting up bodies to repre-
sent speci?c sections of the membership. The repre-
sentative governing body option relied on a
balance of membership in the Council to re?ect
the interests of members generally. The executive
direction option suggested following the example
of the Institute of Directors or the Confederation
of British Industry by establishing a delegation of
power from the governing body to act as a full-
time executive head. Only the divisionalisation
option was presented as taking into consideration
the process of specialisation in the professions in
recent years and allowing members to be grouped
by special interests, with a substantial measure of
devolved power. Consistently, the Tricker report
also advocated the creation of ‘‘Subject Confer-
ences” within which members would coalesce
according to their main speciality (such as taxation
or insolvency). Once the diversity in the chartered
accountant identity had been recognised and
organised, it also had to be (politically) repre-
sented. A change in the composition of the Council
was therefore suggested (Willmott et al., 1993, p.
77) with 40% of the councillors being representa-
tives of the subject conferences. The Tricker report
was trying to improve representation in profes-
sional life by acknowledging the subdivisions that
had emerged between members in practice and
members in industry and commerce, and also
between large ?rms and small practitioners. This
reorganisation of the ICAEW’s constitutional
arrangements had its merits: clear subdivisions,
especially if they were technically grounded, made
it easier to represent members because they pro-
48
According to (Willmott, 1986, p. 572 quoting Hopkins, 1980,
p. 23), in 1979 a 74 member Council included only 26 who were
not”practising”.
394 C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408
vided a robust taxonomy for classi?cation. Techni-
cal subdivisions were more innocuous than poten-
tially broader divisions which, despite being
apparently based on objective traits, turned out
to be less operational due to their fuzziness.
Tricker’s programme to run the Institute was
not, however, followed by the Worsley report. Ini-
tially intended as an appraisal of the former, the lat-
ter went further and suggested an alternative way of
resolving the Institute’s governance problems. Basi-
cally, Tricker was considered to have gone too far in
recognition of the fragmentation of ICAEW mem-
bership (Willmott et al., 1993, p. 78). There were
fears that if the profession was to come under threat
from hostile public opinion and public authorities,
technical subdivisions would jeopardise the fac ßade
of unity on which the privileges attached to self-reg-
ulation rested (Robson & Cooper, 1990). The idea
of a membership based on speciality only was criti-
cised on the basis that it might encourage the loss of
members to other, more specialised high-pro?le
bodies such as the Association of Corporate Trea-
surers. Instead of crystallising subdivisions in a clear
and institutionalised de?nition, Worsley (p. 25,
quoted by Robson & Cooper, 1990) recommended
improving communication with members and edu-
cating them about their latent professional interests.
While acknowledging that ‘‘the e?ectiveness of the
discourses developed by Council on behalf of the
members rests upon the fact that they are perceived
as authoritative expressions of opinions by those
with specialist expertise” (Robson & Cooper,
1990, p. 20) the report called for a ‘‘more open style
administration, to greater readiness to discuss issues
openly and to the practice of serving members in a
way which makes them feel that it is their Institute”
(Robson & Cooper, 1990, p. 58).
The simultaneous need to preserve both the Insti-
tute’s status as a macro-actor with the capacity to
represent its members, and its social status as an
important, undisputed actor in national economic
life, would be met if chartered accountants were col-
lectively recognised for their technical expertise and
if they individually recognised the e?orts of their
Institute to promote that technical expertise (Will-
mott et al., 1993, pp. 79–81). The idea of forming
practitioners’ groups based on technical interests
was adopted, and ‘‘Faculties” (such as the Tax
and Audit Faculties) were created. However, the
Worsley report decided to defuse the potential insta-
bility that could arise in the ICAEW’s governance if
these groups were to be given political representa-
tion. The Council’s electoral system remained virtu-
ally untouched (Willmott et al., 1993, p. 80) and
another scheme, based on the establishment of
‘‘Boards”, was set up alongside the faculties to ‘‘rep-
resent” members’ interests.
49
The report recognised
the ‘‘natural” division existing between members
working on an independent basis and members
occupying a salaried position in industry or com-
merce. Worsley therefore recommended installing
a Board for Members in Industry and Practitioners’
Boards. Although he had suggested creating two
di?erent Practitioners’ Boards, one for large and
medium-sized ?rms and one for small practitioners,
what eventually emerged from the institutional
reform was a single General Practitioner Board,
with members ranging from the very large to the
very small ?rms. Rather than seeking to represent
practitioners by de?ning what they were and setting
up adequate policies to cater for their needs (the
Tricker report’s essential recommendation), the
board system tried to achieve this goal by inviting
members to participate in the ICAEW’s a?airs.
Because this once again rested on the assumption
that members wished to participate and were simply
waiting for an opportunity to do so, the result of
this system was the opposite of its initially intended
goal: inscribing practitioners in patterns of gover-
nance without trying to explicitly de?ne their speci-
?city resulted in the boards having very low
representativeness. As will now be shown, this was
particularly true in the case of small practitioners.
The transformation of the small practitioner into the
general practitioner
During the 1980s, the Small Practitioner Advi-
sory Committee became the Small Practitioner
Committee (SPC, in 1983) and was then incorpo-
rated into the General Practitioner Board (GPB,
in1990) set up on the Worsley report recommenda-
tions. However, this transition was not so clear
and linear as the two dates suggest. The process of
raising the status of the SPAC by making it ?rst a
49
The report remained vague on the exact role these boards
would play. Apparently, the boards were to act as forums where
the discussion of matters of importance for their respective
constituencies would serve to enlighten the Council in the
conduct of its administrative and political duties (Willmott
et al., 1993, Note 21). This role was consistent with the Worsley
report objective to increase ICAEW members’ involvement in
institutional life, without providing them with the political means
to in?uence the Council’s decisions.
C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408 395
full-standing committee (i.e. a committee under the
direct supervision of the Council) and then part of
a larger representative body was heavily debated
among the membership of the SPAC and SPC. In
line with the critical attitude characteristic of the
SPAC in its later period, comments on the Worsley
report recorded at the 13 January 1986 meeting
underlined that ‘‘it was the general consensus of
opinion that while the proposed structure should
enable more members who wanted to be involved
in Institute work to do so, unless the wish to partic-
ipate was present, no structural change would make
any signi?cant di?erence.” During this period, the
need to communicate with the small practitioners
was still preponderant. However, the satisfaction
of this need was not encapsulated in the global/local
dimension imparted to the problematisation of small
practitioners by rooting the translation process in
the district societies’ structure. The issue of the small
practitioner became separated from the issue of
reforming the district societies when the SPC became
a full-standing committee of the Council.
50
Although the SPC continued to try and build rela-
tions with members and to keep a critical eye on
the projects to reform the profession, its slow evolu-
tion towards a general practitioner board endowed it
with a new role concerning small practitioners.
From 1981 on, SPAC members lobbied the
Council for higher status in the ICAEW hierarchy.
As they said: ‘‘since its ?rst meeting (. . .) SPAC
has become a valuable channel of communication
between smaller practitioners and committees of
the Council. It is probably more truly and more
directly in touch with individual members than
any other committee of the Council. However, the
SPAC believes that it has little or no in?uence on
the formulation of Institute policy and that the
views of smaller practitioners are not genuinely
being heeded by the Council (. . .) it believes that it
lacks the standing and the resources necessary for
its advice and recommendations to have e?ect.
The SPAC believes that the importance of smaller
practitioners should be recognised by awarding the
SPAC a status equal with that of the Industrial
Members Committee”.
51
Whether the decision to
turn the SPAC into an SPC was motivated by a
desire to improve its contribution or a desire to
place it under closer scrutiny
52
is uncertain. How-
ever, the SPC was allocated a new mission by Harry
Singer (the then ICAEW president and the small
practitioner who had directed the 1975 enquiry).
When he came to a SPAC meeting on 10 March
1982, he reported that during his period of Presi-
dency he had encountered expressions of doubt as
to whether smaller practices could produce the ser-
vices needed by the public. One of the tasks of the
future SPC would therefore be to ‘‘raise standards
in some smaller practices and consider how the
Practice Advisory Service could be used for this
purpose”.
The idea of ‘‘improving” the small practitioner
was not new. The 1961 enquiry on the small practi-
tioner was actually part of the same project to set up
a Practice Advisory Service. There is not enough
space here for detailed analysis of the action taken
by the ICAEW to e?ectively help small practitioners
improve their technical and organisational capaci-
ties, or to assess the extent of the in?uence of the
SPC on the decisions made by the Council, but it
is certain that the form and the attributions of the
SPC were appropriate for its new task. It became
a reduced committee (a sort of think tank) and
was consulted more frequently by the Council and
other committees.
53
It was under the aegis of the
SPC that a special working party was set up in
1983 to inquire on ‘‘reported bad practice” in small
?rms. It was to the SPC that the Council decided to
transfer the Enterprise Task Force (1986) initially
placed under the supervision of the General Pur-
50
The reform of the district societies led to the publication of a
‘‘Future of the District Societies report” in 1982 and was later
integrated into the plans to reform the ICAEW’s institutional
structure.
51
Minutes of the 16 November 1981 meeting of Working party
A of the SPAC.
52
Addressing the SPAC (12 March 1981) the secretary of
Institute had been very critical. ‘‘[the achievements of SPAC]
were not mean, but in answer to the question is the smaller
practitioners’ disa?ection for the Institute less apparent in 1981
than in 1974, he suggested that probably little had changed (. . .)
the principal di?culty is that SPAC and other committees jointly
failed to establish a constructive relationship. SPAC is viewed as
meddling in other committees’ a?airs.”
53
The SPC seems to have played an important role in the
ICAEW’s decision to sponsor the Association of Accounting
Technicians, which resulted from the 1981 merger of the Institute
of Accounting Secretaries and the Association of Technicians in
Accounting and Finance. The introduction of a junior quali?ca-
tion would help to reduce the pressure to recruit certi?ed
accountants and improve practitioners’ standards by relieving
them of clerical work. A special programme of exemptions for
those who wanted to qualify as chartered accountants was even
envisaged. However, initial support turned into opposition when
the AAT claimed practising rights for its members.
396 C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408
poses and Finance Committee. This task force had
been created to foster relations between the profes-
sion and the host of institutions (such as Business
Links) that had been created by the government in
the mid-1980s to help local enterprises. The Enter-
prise Task Force became a sub-committee of the
SPC (and later of the GPB) and Enterprise Liaison
O?cers were appointed to encourage small practi-
tioners to use these newly-created governmental
institutions.
The decision to incorporate the Small Practi-
tioner Committee into the General Practitioner
Board was not initially part of the agenda to
improve small practice, but, as has been shown, a
consequence of the application of the Worsley
report recommendations. The General Practitioner
Board was supposed to be a representative body,
not an advisory committee. Moreover, its purpose
was to accommodate ?rms of all sizes into two (pos-
sible) subdivisions, one for national ?rms and one
for local ?rms. The SPC was initially opposed to a
body where the identity of small practitioners would
be diluted. It was acknowledged that ‘‘the smaller
practitioners’ interests di?ered from those working
in larger ?rms and therefore (. . .) the SPC would
support the possibility of setting up two boards”.
54
But contrary to the Council’s expectation, the SPC
was not in favour of the name ‘‘district practitioners
board” or ‘‘local practitioners board”. ‘‘The major-
ity of small practitioners were general practitioners
and the proposed title of General Practitioner
Board was a good one and should be retained”.
55
Although the solution of a single board was eventu-
ally adopted, the fears of SPC members were dissi-
pated when it soon became clear that because of
the disa?ection of the big and medium-sized ?rms,
the GPB would de facto become a small practitioner
board and its activities would continue those of the
SPC.
56
In the 1970s and 1980s, changes in the nature of
the ICAEW as a professional body entailed a trans-
formation in the way it could continue as an macro-
actor. Before 1970 the strategy of the Institute’s
leadership was to try and absorb other professional
associations into a larger structure in which profes-
sional identities would be rearranged to remain rep-
resentable. The failure of this strategy left the
Institute to manage its own heterogeneity alone,
while also having to cope with the increasing exter-
nal pressure on the accountancy profession. Solu-
tions to the need to represent heterogeneity were
eventually found not in greater representativeness
but in an idealised representation of chartered
accountants, united around a project of technical
excellence that could enhance the ICAEW’s reputa-
tion and bene?t its members individually. Restoring
the sense of belonging to a community of peers by
fostering participation in an enterprise of profes-
sional scale nevertheless proved a risky venture,
since it could ultimately emphasise the latent hierar-
chical structure of this community of peers by
implying that some of them had to be ‘‘improved”.
As far as the small practitioner was concerned,
his identity was now independent of the spatial
representations which encapsulated it in the earlier
period. The new problematisation of small practi-
tioners sought to make them good practitioners,
and a new host of programmes and agencies (such
as the Enterprise Task Force) was set up to mobilise
them. The small practitioners were no longer distant
citizens of the ICAEW. They were now its lay citi-
zens, who needed to be educated and taught to
become good citizens. This need was to become
even more urgent in the next period, when the Insti-
tute experienced yet another change in its nature
and the adjective ‘‘small” found itself laden with a
new meaning.
From the general practitioner to the governable
practitioner (1990–2000)
The implementation of the insolvency (1986),
?nancial services (1986) and auditing (1989) regula-
tions certainly represented a sea change in the life of
the ICAEW. The enforcement of the new rules, espe-
cially in auditing, created considerable commotion in
the small practitioner community. The regulations
required introduction of monitoring procedures to
ensure that audits were carried out according to stan-
dards of good practice and competence. The ?rst
report of the monitoring assessment presented by
54
Minutes of the SPC steering committee 13 September 1989
meeting.
55
Minutes of the SPC steering committee 13 September 1989
meeting. The SPC thus advocated the creation of a General
Practitioner Board and a National Practitioner Board within a
Practitioner Board. Interestingly enough, it was during this
troubled period that several attempts at a de?nition of small
practice were made. In its meeting of 22 May 1989 the SPC stated
that ‘‘there was no hard and fast de?nition although a smaller
practitioner deals mainly with small businesses and does not
belong to a national network of o?ces”.
56
In 1991 a small practitioner newsletter entitled ‘‘Good
Practice” was launched by the GPB.
C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408 397
the professional institutes to the Department of
Trade and Industry in 1994 showed that only one in
four auditors of listed companies inspected by regula-
tors met absolutely all of the new audit require-
ments.
57
Meanwhile, disgruntled small practitioners
vociferously uttered their discontent, complaining
about the ‘‘heavy-handed and unwarranted enquiry
of audit regulation inspections” which was obviously
ignoring ‘‘the deep sense of pride in both our quali?-
cations and our work for clients”.
58
The principal reason why representation of small
practitioners as ‘‘malpractitioners” had become an
issue, turning a regulatory problem into a profes-
sional problem, was because the monitoring proce-
dures had been organised and carried out by the
professional institutes themselves. Although similar
profession-based frameworks to control the quality
of the service delivered by auditors were well-estab-
lished in other European countries,
59
the introduc-
tion of such a requirement was considered a
novelty in Britain
60
given the tradition of self-regu-
lation and the ‘‘gentleman’s” ethos underpinning its
system of professions. The direct enforcement by
the State of quality monitoring in auditing, insol-
vency and ?nancial services was used as a deterrent
to encourage the involvement of professional bodies
in the implementation of quality controls. The pres-
ervation of their privileges as self-regulated institu-
tions thus came at the expense of playing a ‘‘dual
role”.
61
Being both ‘‘gamekeeper and poacher”, at
once both the accountants’ representative body
and their regulator, meant running the risk not only
of enlarging the ‘‘gap” between certain categories of
members and the ICAEW, but also of making that
gap measurable in terms of distance from a profes-
sional ideal. Assessing the competence of members
relied on the assumption that the interpretation of
what competence is about was shared by all profes-
sional accountants. More precisely it rested on a
conception of professional Institute governance that
dated back to the times when structural di?erences
within membership in the production of accounting
expertise were not represented as di?ering substan-
tially. As the previous section of this paper has
shown, by the beginning of the 1990s, when the
regulation started being applied, those times had
gone.
The regulation of practice and the need to govern
small practitioners
During the 1980s, British accountancy bodies had
to combine an increasingly commercial role for their
members with claims to represent professionalism
and act in the public interest (Robson et al., 1994;
Cooper et al., 1996). The Worsley report had already
noted this commercial role, which had entailed an
‘‘explosion of services which members in practice
o?er, whether in large or small ?rms”; an explosion
which meant that ‘‘the horizons of the ?rms are no
longer bounded by the subjects in which the Institute
examines” (Worsley, 1985, p. 18 quoted in Robson
et al., 1994, p. 544). The increasing dispersion of
the activities of chartered accountants naturally
complicated the process of representing them and
put pressure on the Institute leadership, forced into
encouraging expansion of the chartered accountant
identity while simultaneously avoiding the most
damaging consequences of this expansion for the
ideal of professionalism this Institute was supposed
to incarnate. As noted earlier, the choice was made
after the Worsley report to build members’ sense of
belonging to a community of peers not by develop-
ing democratic representation of sectional interests,
but rather by trying to promote professional excel-
lence within the ICAEW and by advertising this
excellence to the world outside.
The programme to enhance the quality of mem-
bers’ delivery was, however, to take on a new signif-
icance as professional institutes found themselves
obliged to undertake systematic monitoring of prac-
tice in certain areas such as auditing or the provision
of ?nancial services. This obligation resulted from
enforcement of the 1986 Financial Services Act
and the 1989 Companies Act, the latter introducing
into British law the provisions of the Eighth Euro-
pean Directive on the quali?cations of persons
responsible for carrying out the statutory audits of
accounting documents. As investment advisors,
accountants came to be regulated by the 1986 Act.
57
Auditors fail to meet all standards, Financial Times, 20
December 1992, p. 19.
58
‘‘Small ?rms ?ock to SPA” Accountancy Age, November
1996, p. 16.
59
See Continuous Quality Assurance. Statutory audit in
Europe, Fe´ de´ ration des Experts-Comptables Europe´ ens, April
1998.
60
Inadequate professional work was in general reported by
clients or state agencies, rather than coming to light as a
consequence of systematic monitoring of practice. Malpractice
fell within the remit of professional bodies’ disciplinary arms,
being therefore put down to individual behaviour and never
considered as something ascribable to a speci?c professional type.
61
Accountancy, January 1995, pp. 2–3.
398 C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408
With regard to professional bodies, this Act made
provision for a legal framework never before experi-
enced in the UK. The Department of Trade and
Industry, as the government agency responsible for
the regulation of investment advice, set up a desig-
nated body named the Securities and Investments
Board to oversee and authorise sector-based self-reg-
ulatory organisations and Recognised Supervisory
Bodies. These Recognised Supervisory Bodies,
which included professional organisations, would
regulate the investment business conducted by their
members (Radcli?e et al., 1994). Statutory law was
thus used to assign to a professional association
the day-to-day regulation of its membership, under
governmental supervision. In a country with a long
history of the professions’ independence of the State,
this seemed an alternative to direct supervision by a
public administration. However, it was endowing
professional bodies with a new role, that of assessor
of the quality of their members’ work.
When the Recognised Supervisory status was
adopted by the ICAEW, its Council advertised it
as a crucial step if chartered accountants wanted
to safeguard the value of their quali?cation. The sit-
uation was presented as a question of whether the
ICAEW was to remain a leading self-regulatory
body or surrender its authority to other organisa-
tions (Radcli?e et al., 1994, p. 612). The apparent
consensus on the new ‘‘dual role” of the Institute
ignored the risks for the unity of membership once
the time to actually apply the regulation came.
Improving practitioners was intended to contribute
to the stability of the Institute as long as it was seen
as innocuous, benevolent and helpful if occasionally
patronising. The exercise of the ICAEW’s new pow-
ers would certainly result in betterment of profes-
sional standards in the long term, but it could
also lead to a representation of members in terms
of good and bad (or at least insu?cient) practice.
If stigmatisation was to concern not only individual
members but speci?c categories of the membership,
a problem was in store for governance of the
Institute.
In the following two sections, the materialisation
of the riskof stigmatising certainsections of the mem-
bership is examined with reference to the regulation
of auditing. The ICAEW’s new dual role meant that
the small practitioner must be reinvented as a ‘‘good
practitioner”. The extension of chartered accoun-
tants’ range of activities provided the Institute’s
authorities with new opportunities to achieve this
task.
Auditing the auditor and the consequences
The European Commission issued a directive in
1984 requiring each member state to make provi-
sions to ensure that national rules met common stan-
dards for the education, training and quali?cation of
auditors. In particular, it required that all auditors
be licensed, monitored, disciplined and regulated
by independent bodies. The implementation of those
requirements did not prove easy in the UK (Cooper
et al., 1996). At a time when the auditing industry
was booming, threats such as the possibility of an
independent body to regulate auditors, in combina-
tion with restrictions on the sale of non-auditing ser-
vices in order to strengthen auditors’ independence
in respect of clients, alienated the professional bodies
in general, and the ICAEW especially. The threat of
a reduction in auditors’ freedom to market lucrative
consultancy services along with statutory audits
mainly regarded the bigger ?rms. Although some
sections of the ICAEW voiced their unease and fears
about the Institute adopting a ‘‘dual role” both as a
professional association and a regulator, the bar-
gaining with the public authorities eventually
resulted in the option to have professional bodies
themselves organise the regulation of their own
members (Cooper et al., 1996).
The introduction of the regulation of auditing sub-
stantially modi?ed the meaning of the expression
‘‘governing the Institute”. The problemwas no longer
to try and establish a link with the lay citizen in the
Institute to show him ‘‘the way to good practice”.
The new regulation itself had established that link,
though in a way and to an ‘‘extent” that the Institute
had not expected. Towards 1993–1994, the ‘‘letters to
the editor” section of Accountancy, the Institute’s
monthly publication, started to ?ll up with outraged
complaints from small practitioners about the overall
philosophy of the quality control process, and more
particularly the attitude of ICAEW inspectors. In
spite of the e?orts to communicate with small practi-
tioners mentioned in the previous sections of this
paper, the inspector’s visit was, for many small prac-
titioners, the ?rst contact with their Institute since
they had quali?ed. This might explain why the
ICAEW-small practitioners link turned out to be rep-
resented in terms of neglect and contempt. Auditing
regulation made visible the existence within the com-
munity of chartered accountants of an implicit hierar-
chy in terms of professional excellence.
The Eighth Directive’s provisions were intro-
duced into British law through the 1989 Companies
C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408 399
Act. Within a legal framework akin to that of the
1986 Financial Services Act, the ICAEW, the ICAS,
the ICAI, the ACCA and the Association of
Authorised Public Accountants (AAPA) became
Recognised Supervisory Bodies. A professional or
a professional ?rm could not describe themselves
as auditors unless they had registered with one of
these bodies. To obtain a practising certi?cate, pro-
fessionals had to comply with all rules and regula-
tions issued by the Recognised Supervisory Bodies,
including of course the rules regarding professional
quali?cation. Quali?cation here must be understood
as education (which means that regulated profes-
sionals need to receive professional training) but
also as the regular assessment of professional qual-
i?cations throughout the licensed auditor’s entire
career. Assessment of professional quali?cations
concerned the performance of auditing expertise in
accordance with due standards of good practise.
62
The instrument used to test compliance with the
regulations was the Joint Monitoring Unit (JMU).
Operating as a limited company owned 80% by the
ICAEW and 10% each by ICAS and ICAI, the
JMU was established in 1987 to monitor the compli-
ance of ?rms authorised to conduct investment busi-
ness under the 1986 Financial Services Act.
63
In 1991
this role was extended to include the work of auditors
registered under the 1989 Companies Act. Monitor-
ing involved issuing and reviewing ?rms’ annual
returns (i.e. the questionnaire on licensed activities
every ?rmwas obliged to ?ll in annually), conducting
inspection visits to the ?rms and reporting the results
of those visits to the Institutes’ Audit registration/
Investment Business Authorisation Committees. In
addition, the Recognised Supervisory Bodies had to
produce a yearly report on regulation to the DTI.
The fundamental objective of the JMU was to
monitor ?rms in their conduct of audits and invest-
ment business and report its ?ndings to the relevant
committee of the appropriate Institute. The JMU
did not make judgements concerning a ?rm’s ?tness
or otherwise to continue a particular regulated
activity, unless it believed that the ?rm’s actions
had been to the detriment of the public and/or its
clients. In such cases, the JMU was obliged to
report the facts and its concerns immediately,
directly to the appropriate Institute committee with
power to suspend the ?rm’s activities. A second
declared aim of the JMU was to provide guidance
and tuition to the ?rms visited, so that they could
improve their methods and procedures to ensure
better compliance with the regulations.
The obvious ambiguity between the JMU’s role as
‘‘the profession’s policeman” and educator resulted
in a misunderstanding over its functions, especially
among the smaller-?rm tier of the profession. From
the ?rst visits in 1991 until 1994, the JMU operated
full visits. This meant that the scope of the visit was
unrestricted: although the inspectors’ aim was to
check compliance with the audit regulations by direct
scrutiny of audit ?les, they could demand access to
any record they thought might be relevant. The
JMU visit was therefore perceived as a burden rather
than educational. Some practitioners felt even bul-
lied, saying the inspectors behaved like a ‘‘profes-
sional Gestapo”. Moreover, the visit was based on
veri?cation of compliance with standards essentially
designed by and for larger ?rms (Page, 1997). After
1994 on completion of a full round of visits, the
JMU was able to provide the DTI with a picture of
audit compliance in the UK. On the basis of this pic-
ture, a special report onways toimprove the monitor-
ing process was drafted by Professor Moizer (1994).
The report advised a radical change in the design of
the compliance visits, recommending that auditors,
rather than auditing, should now become the focus
of the visits. Firms should compromise and install
internal control systems such as ‘‘cold ?le reviews”
(review by the auditor, a partner in the ?rm, or a peer
outside the ?rm), and the security and e?ciency of
these control systems would then be tested by the
JMU inspector. Thus, in a sense, the inspection work
would become collectivised within the profession.
After the Moizer report, the philosophy of JMU
inspections underwent a profound transformation.
In association with a change at the head of the mon-
itoring body, the initial inquisitive approach was
dropped and replaced by a risk-based analysis of
compliance with audit standards, combined with ver-
i?cation of the ?rm’s own quality control procedures.
The initial regulatory style raised fear and anger
because it unveiled the logic of small practice by try-
ing to impose on small professionals a system of rep-
resentation (based on veri?cation of actual
compliance with standards essentially designed by
and for larger ?rms) that was completely extraneous
62
Report by the ICAEW, ICAS and ICAI to the Department of
Trade and Industry, HMSO, 1997.
63
It is therefore important to note that the JMU is not a peer-
review system. Although it employs chartered accountants as
inspectors, they are not practising members of the ICAEW, ICAS
or ICAI. Also note that other professional bodies such as the
ACCA run their own monitoring unit independently.
400 C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408
to their conception of audit practice. The revamped
procedure for assessing professionals’ performance
allowed the small practitioner to be constituted as
an auditable object within a procedure that de?nes
the object and its measurement simultaneously
(Power, 1996). But, as will now be shown, it also
involved the need to ‘‘reinvent the small
practitioner”.
The reinvention of the general practitioner: the
‘‘Future of the Smaller Firm” report and the proposal
to set up a general practitioner specialism
In a way, auditing regulation gave visibility to
something everybody knew existed but nobody
could precisely circumscribe: small practice as a col-
lective category. The representation of the small
auditor provided by JMU technology might not
be a ‘‘true and fair view” of what the small practi-
tioner is. Truth is not important here, neither is fair-
ness (and the JMU was initially decried as unfair).
What is important is that the JMU’s action pro-
vided a focal point around which diverging repre-
sentations of what small practice is about could
converge. It provided the ICAEW and the Depart-
ment of Trade and Industry with a public image
of lay members. It provided small practitioners with
an instrument to see themselves and a basis on
which they could build collective action and active
dissidence.
64
Along with regulation of ?nancial ser-
vices, regulation of auditing thus forced the Institute
to explore alternative ways of representing what was
already represented by mere application of rules.
After 1993, it became clear that the audit func-
tion would no longer constitute the backbone of
the identity of many small ?rms of chartered
accountants.
65
Since the cost of complying with reg-
ulations is independent of the number of audits
actually carried out, many small ?rms were reported
to be pulling out of the auditing business or even
registering with the ACCA, whose quality control
procedures were supposed to be lighter-handed.
Auditing was thus perceived as becoming a special-
ity for larger ?rms with the necessary resources for
regulatory compliance. Besides, one of the results
of the JMU’s action was that many (small) ?rms
were now reluctant to seek advice from the ICAEW
or use its practice advisory services, for fear of trig-
gering o? a JMU visit.
66
The problematic of consti-
tuting the representation of small ?rms around the
idea of the ‘‘good practitioner”, as inherited from
the previous period, could no longer be constructed
around the traditional image of the accountant–
auditor: there were fewer and fewer small ?rms of
auditors, and it was increasingly di?cult to commu-
nicate with them outside the regulatory process. The
distinction between good and bad ?rms had to be
displaced.
A new idea therefore emerged: what small com-
panies needed was not auditing services, but busi-
ness advice, and small practitioners could be
converted into small business advisors.
67
This idea
was not new, and had been included in the pro-
grammes of the Enterprise Task Force which sought
to mobilise small practitioners in the day of the
SPC.
68
What was new was that it was now com-
bined with a host of new moves aimed at locking
up small practitioners into their new identity. For
instance, there was now clear support among the
GPB for the government’s proposals to raise the
audit threshold. As one of the members of the board
declared: ‘‘we support their [the government] views
and we will continue to press for a substantial
increase in current limits [of the audit threshold]. . .I
believe we are trained as business advisers and not
64
See the ‘Discussion and conclusion’ section of the article.
65
The Chartered Accountants 2005 report, published by the
Institute in 1995, predicted that as the standard audit required
under UK company law was a mature product, income from it
was unlikely to grow faster than the economy. Besides, auditing
would come under pressures making life harder for many of its
practitioners. These pressures would include the loss of audit
work as audit exemption thresholds were raised towards the EU
limits, real-time information on company performance leading
users to question the value of annual audited information,
competitive pressures leading to low margins and a further
concentration of public companies’ audits in the hands of the
largest ?rms.
66
Minutes of 1 February 1995 meeting of the GPB.
67
At the 3 June 1996 meeting of the GPB a paper was presented
by the Business Bureau (a department of the Board of Members
in Industry). ‘‘The needs of SME and how quali?ed accountants
can help” indicated that members could do more than accounts
and tax work and that the role of adviser needed to be developed
more positively. Some members were not competent enough to
provide e?ective business advice due to lack of commercial
awareness. The Enterprise group (the successor of the Enterprise
Task Force) should do more to advertise Chartered Accountants/
business links. As the paper said, ‘‘many practitioners don’t know
that their clients want services such as those identi?ed, members
need to educate clients”. The way to do this was to develop
practitioners’ skills (by means such as help-sheets and marketing
courses). The report concluded that ‘‘Tax-shops can be defeated
if GPs provide a wide range of services”.
68
Minutes of the 26 January 1995 meeting of the Council. See
also minutes of the 12 December 1995 meeting of the GPB.
C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408 401
simply auditors and we all have much to o?er SMEs
outside of the audit function.” The Board was thus
in favour of an audit, for instance, if required for
purposes of bank ?nancing, but not in favour of
statutory audit. ‘‘This might mean marketing our
skills di?erently than we do now, but I urge you
to start now, because the ball is rolling ever faster
in this area”.
Even though the plan to set up a general practice
faculty was not carried through,
69
a report on the
‘‘future of the smaller ?rm” was commissioned from
the GPB by the Council as part of a larger delivery
on the future of the Institute in 2005.
70
The conclu-
sions of this report indicated that ‘‘general practice
needs to be accepted as, and treated as, closely akin
to a specialism in its own right; general practitioners
need to be trained for this role in the same way that
a technical specialist develops expertise.” Such prac-
titioners now had to cope with important changes
that would a?ect their environment, including ‘‘a
greater explanation of the services proposed to the
client, higher usage of computers, increased atten-
tion to marketing and greater co-operation and
communications between practices.” Key opportu-
nities for small ?rms lay upmarket, by reducing
the emphasis on compliance work and developing
skills to o?er value-added products and services in
areas such as business advice, support and consul-
tancy, preparation of bespoke reports to third par-
ties or personal ?nancial services, but the report
also identi?ed as successful practices those which
would be able to provide many strands of advice
and o?er ‘‘integrated solutions to a complete range
of small business problems”. Help for this type of
business could extend well beyond the traditional
tax and accounting domains to recruitment and
training, sales and marketing, customer service
and care.
An essential aspect of the report is that it empha-
sised practice management.
71
The 1990s had intro-
duced the need to turn small practitioners into
governable practitioners. This transformation
required the Institute to intrude on what seemed
to be the Holy of Holies in the fabrication of profes-
sionalism, the practice itself. It was no longer a
question of bringing the small practitioners to the
Institute, but of bringing the Institute to them.
72
Regulation on the one hand, and advertisement of
the exemplary nature of more sophisticated and
organised ways of producing expertise on the other,
were eventually the means by which a homogeneous
image of the membership (or at least the practising
membership) was achieved.
73
The di?erence no
longer seemed to be between local and global pro-
fessionals or between big and small ?rms, but
between bad practices and good practitioners, the
men and women able to run their practice e?ciently
enough to cope with the regulatory burden and pro-
vide ‘‘value for money” services to their clients. By
having small practitioners self-assess their compli-
ance with the regulation and encouraging them to
rationalise the production of their expertise, the
Institute had apparently ?nally managed to make
these small practitioners participate in their own
representation.
69
Because it would be seen as a competitor to other faculties,
especially, given the interests of small practitioners, the Tax
Faculty. See minutes of the 20 February 1997 meeting of the
GPB. At one of its meetings (14 March 1996) the GPB had
unanimously supported the motion of one of its members that
small practitioners should be encouraged to call themselves
‘‘chartered accountants and business advisors”.
70
The future of the smaller ?rm. A Report by the General
Practitioner Board. London, The Institute of Chartered Accoun-
tants in England and Wales, 1994. The Chartered Accountants
2005 report predicted a decline in compliance work in general
(which would a?ect areas such as ?nancial reporting and tax),
and sti?er competition for smaller practices from banks (?nancial
reporting and corporate ?nance), technology and communication
companies (auditing), entities located in low-cost economies
(auditing), and former Inland Revenue sta? (tax advice and
planning). On the other hand this report vaunted management
consultancy as the area in which chartered accountants are
ideally placed because of their ‘‘broad skills and experience [. . .]
the advantages of an existing client base and a reputation for
integrity and value”. The report added that ‘‘the business advice
traditionally o?ered by practising accountants will be an
increasingly important value-added service, although it will not
necessarily be badged as consultancy”.
71
The Chartered Accountants 2005 report stresses that unless
‘‘they [the small ?rms] can ?nd a sustainable niche or act in
cooperation with other small ?rms, competitive, technological
and regulatory pressures will make the activities of the very small
?rms much less pro?table”. Thus, one of the key aptitudes small
practitioners must show in the future is ‘‘the practice manage-
ment skills necessary to run their own businesses e?ectively”.
72
The same report sees the role of the Institute as ‘‘giving
members the support, facilities and resources they need to
maintain and develop their skills, competitive edge and market-
ability after quali?cation”.
73
On 15 May 1996 a general group report of the Business
Bureau on professional and business requirements of members
indicated that ‘‘some ?rms do a lot of marketing without realising
it and few have a market strategy”.
402 C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408
Discussion and conclusion
This article has shown that professional associa-
tions, like political bodies, need to cater for the aspi-
rations and needs of their membership. This task
involves galvanising people into action when the
future of the profession seems at stake and there is a
common enemy to ?ght (generally the State or a com-
peting professional association) or, on the contrary,
soothing anxieties in certain sections of the member-
ship when a controversial decision (for instance, a
merger with another association) has been made.
Representing people’s interests raises few di?culties
when people and their interests are fairly homoge-
neous. However, as is the case for the Institute of
Chartered Accountants in England and Wales, the
task of representation has become complex as di?er-
ences have grown amongst its membership. Walker
and Shackleton (1998), Willmott et al. (1993), Radc-
li?e et al. (1994), and Cooper et al. (1996) all note
this diversity in their work on the British institute.
In addition to the aforementioned contributions,
the present article set out to explain that the task
of representation also unfolds in the long run and
on a continuous basis. If governing implies repre-
senting, this study shows that governing primarily
means de?ning what is to be governed. Scrutiny of
the ICAEW’s archives reveals the energy expended
to represent particular sectional interests in the three
meanings highlighted in the introductory section of
the article (i.e. politically, cognitively and statisti-
cally speaking). As far as the ICAEW’s small practi-
tioners are concerned, the most striking fact is that
no hard and fast de?nition of what a small practi-
tioner (or a small ?rm) is was ever laid down by
any of the successive committees and boards
assigned the task of representing the small practi-
tioner category. The main reason for this does not
seem to lie in changes in the distribution of chartered
accountancy ?rms by size over the more than thirty
years of history spanned by the article. Instead, the
lack of any ?rm de?nition relates to the need to con-
stantly de?ne and rede?ne small practitioners’ iden-
tity in response to the evolving nature of the
professional body. This need also explains why size,
the most obvious de?ning characteristic of the small
practice, has seldom been placed at the core of the
relevant representation process. Instead, the paper
shows how elements such as geographical distance
or the measurement of practice quality have been
used to help represent the distant, the lay and, ?nally,
the governable small practitioner.
However, as a conclusion on more than thirty
years of constitutional history, it is arguable that
from a strictly political point of view, very little
has in fact been achieved by the ICAEW in its
e?orts to represent its small practitioners. The need
to ‘‘communicate” (according to the Latin root of
this word, ‘‘to share” common things) with them
has been constantly rea?rmed, but small practitio-
ners’ views have very rarely been taken into consid-
eration in designing the Institute’s policy (even
though the attitude of the SPAC, SPC and GPB
has been anything but subservient). During the per-
iod covered by the paper, no constitutional reform
made any provision for proportional representation
of membership in the Council. Yet despite the
e?orts deployed to see the Institute as a political
body and make it a representative body, the
ICAEW is still not a democratic body where partic-
ipation is seen as natural. For a long time now, the
vast majority of its members have not been inter-
ested in participating. However, this does not mean
that the ICAEW did not need to engage in a process
of translation to be able to ‘‘speak on behalf of” and
remain a macro-actor, in the Latourian meaning
explained in the introduction of the article.
This last point raises a series of questions con-
cerning the nature of the ICAEW as a professional
body. If it is not a democratic body in which peers
enjoy equal opportunities to participate, does that
make it an aristocracy, that is to say, etymologi-
cally, a body ruled by the primi inter pares? The
Institute has in fact long been suspected to be the
creature of the bigger ?rms, the only ones able to
second full-time sta? to it and with the necessary
networks and in?uence to carry the voice of the pro-
fession. As authors such as Cooper and Robson
(2006) have suggested, research on topics such as
professionalisation and the regulation of accounting
and auditing should now focus on these dominant
?rms rather than on professional institutions. Now-
adays the remaining Big 4 ‘‘help to produce, as well
as reproduce, the identity not just of accountants,
but also the way economic and social life is to be
conceived, managed and changed” (Cooper & Rob-
son, 2006, p. 436). De?ning what accounting and
auditing are and creating the specialists to imple-
ment and propagate these de?nitions takes place,
according to Cooper and Robson, within expanded
networks that extend far beyond the traditional
institutions of the profession. As accounting and
auditing have encompassed broader aspects of the
economic and the social, these networks have come
C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408 403
to include actors such as non-governmental organi-
sations (NGOs) and international governmental
organisations (IGOs).
74
Professionals from the Big
?rms are thus to be found everywhere, servicing
new types of clients or selling new products to more
familiar ones. They also have informal representa-
tives everywhere in the form of personnel seconded
to the aforementioned professional and governmen-
tal institutions, or former employees who leave to
work for a client, but retain ties with the ?rm as a
member of a sort of ‘‘old boys”’ (and now, increas-
ingly, ‘‘old girls”’) club.
Professional institutes can therefore no longer
stand as convenient shorthand for what ‘‘the profes-
sion” does and thinks. If one takes the view devel-
oped by Cooper and Robson, these institutes can
be considered as a node in the network used by
the Big ?rms to wield their power. Another contri-
bution of this article is to suggest that this situation
should not however lead to ‘‘black-boxing” of pro-
fessional institutes in the study of regulatory and
professional processes. If it is true that the ICAEW
has been instrumentalised by the bigger ?rms, then
that calls for detailed examination of how such
instrumentalisation has taken place over time. This
would require substantial archival work to de?ne
the way the leading ?rms exert their in?uence. Such
a study would, for instance, indicate whether the
locus of in?uence has shifted from the Council to
the di?erent directorates and working parties that
are relevant to the activity of the multinational
?rms. Other avenues could also be explored, such
as a possible change in the pro?le of the presidency
of the ICAEW, towards a greater ‘‘bureaucratisa-
tion” of the o?ce.
75
Whatever research is under-
taken, there is still much to learn on the
profession in general from looking at what happens
inside professional associations.
Examining how the Big ?rms operate within pro-
fessional institutes and, arguably, control them is all
the more justi?ed since these institutes are not just
another link in the Big 4 network. Robson and Coo-
per claim that ‘‘accounting ?rms should be seen as
an obligatory node in the network of institutions
through which regulatory and professional processes
operate” (Cooper & Robson, 2006, p. 417). Drawing
on what has been said in this paper about the
ICAEW’s status as a macro-actor, this argument
can be reversed to add that professional institutes
are obligatory nodes in the network of institutions
through which multinational audit ?rms in?uence
regulatory and professional processes. Powerful as
they have been and as they remain, even after the
blows of Enron and the demise of Arthur Andersen,
the Big 4 are nonetheless not macro-actors in the
same way as institutes. Even though they are often
seen as the de facto voice of the accountancy and
auditing profession, on the national and interna-
tional scene, they are not its de jure representatives.
76
Their position as major players but not macro-actors
is a mixed blessing. On the one hand, the Big ?rms’
dominant position within professional institutions
enables them to enjoy both the symbolic bene?ts of
professional status and the economic bene?ts inher-
ent to their leadership on the market for professional
services.
77
To achieve this, they have to play down
the most visible evidence of their domination, and
therefore need professional institutes that are repre-
sentative of the entire accountancy profession, that
is to say institutes which are also macro-actors in
the Latourian meaning. On the other hand, the Big
?rms need to neutralise any possible opposition that
might come from within the professional body and
?nd expression through the rights professional asso-
74
The World Bank and the World Trade Organization, for
example.
75
The majority of presidents of the ICAEW still come from a
Big 4 background (Boys, 2005). However, the time is long gone
when the founding fathers of the Institute were also the creators
of the current professional giants and the senior partners of the
bigger ?rms (and sometimes their heirs, as has been the case for
the Waterhouse family) seemed to consider it a duty to head the
ICAEW. The president is now more likely to be a man (or more
recently, a woman) who may have given long service in the
administration of the Institute and is at the top of his or her
membership of a multinational practice. The bureaucratisation of
the o?ce thus appears to parallel the bureaucratisation of the Big
?rms themselves.
76
This implies of course that professionals from the Big ?rms
who are elected or seconded to institutions such as the ICAEW or
the International Accounting Standards Board still, consciously
or unconsciously, represent a particular modality of being a
professional accountant and are likely to further the interests of
these ?rms ?rst and foremost.
77
This strategy is best exempli?ed by the role the Big 4 play as
quasi-exclusive producers of accounting and auditing in their
purest form, i.e. standards. As well as being at the apex of the
profession as producers of professional knowledge that imposes
itself as standard knowledge, they are simultaneously at the top
end of the market for accounting and auditing expertise as
exclusive providers of this expertise to the multinational com-
pany. This virtuous (or vicious) circle leads to a situation in which
there is an almost ‘‘ontological” gap, both from a professional
and commercial point of view, between the Big 4 and their (even
most immediate) followers in the professional world.
404 C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408
ciations recognise for their individual members.
Moments of extreme tension, when the big ?rms
have ‘‘?exed their muscles” and taken an overtly
aggressive stand, are fairly rare in the history of pro-
fessional institutes.
78
It is more likely that their
desire to frustrate any attempt to hamper their strat-
egies will take the form of bypassing professional
associations. The bigger ?rms have developed a ser-
ies of parallel committees and working groups that
operate outside the traditional professional forums,
and are used as a vehicle for lobbying companies
and public authorities and furthering their particular
interests.
79
Following the suggestions of Cooper and
Robson (2006), a detailed study of the power and
in?uence of the Big 4 should therefore take into
account both their action within professional institu-
tions and their circumvention of such institutions by
other means of collective action.
The grip of the Big 4 on professional institutes
thus requires analysis more in terms of their needs
than in terms of their sheer strength, as these ?rms
could function without any professional association
to speak on their behalf.
80
This idea, paradoxically,
bring us back to the small practitioners to take up
another agenda mentioned by Cooper and Robson
(2006) as a possible direction for future research.
The study of the marginalised in accountancy and
auditing should not be restricted to those excluded
by the boundary work that leads to legitimisation
of certain forms of practice and exclusion of oth-
ers.
81
The marginalised also exist within recognised
professional bodies. As has been shown in the case
of chartered accountants in England and Wales,
introduction of regulation for the auditing business
demonstrated how small practitioners could collec-
tively be associated with an image of ‘‘bad practitio-
ners”. Regarding our main concern throughout this
article, i.e. analysis of the role professional institutes
play in maintaining the commensurability of the
professional body, the example of the ICAEW and
its small ?rms shows that despite its apparently ines-
capable character, domination is not inevitable, but
needs to be operationalised in order to become jus-
ti?ed. The fact that the Institute is an instrument of
the Big ?rms is not necessarily in contradiction with
the need to develop the Institute as a (representa-
tive) macro-actor and deploy resources to ensure
that the distance between the di?erent ways of
embodying the chartered accountant’s identity does
not become too conspicuously hierarchical.
The professional space has always been hierar-
chically ordered and disdain for certain types of
professional identity has probably existed since the
beginning of the Institute. As indicated in the intro-
duction of the article, there was a time when mem-
bers working in industry and commerce were
outliers within the ICAEW. In the case of small
?rms, the decision to create a speci?c instrument
to represent them could be interpreted as re?ecting
a desire to control representations of small practice,
especially those relating it to ‘‘abnormal” (in the
sense of sub-standard) practice, which is embarrass-
ing given that small ?rms have always been the
ICAEW’s most common type of member ?rm. This
fact explains why any disdain towards high street
practitioners only became problematic when the
Institute was transformed into a governing body,
that is to say when a de?nition of normal practice
78
In 2000 Ernst and Young spearheaded the Big ?rms’ protest
when a proposal to include elective papers in the Institute’s ?nal
exam syllabus was thrown out in an ICAEW members’ ballot. In
the eyes of these members, elective papers would have led to early
specialisation and deepened the fragmentation of the chartered
accountant’s identity. In reaction to the adverse vote, Ernst and
Young withdrew its students from the ICAEW and decided to
train them through the Institute of Chartered Accountants in
Scotland. It was only after a new quali?cation incorporating the
Big ?rms’ requirements for more business-oriented training had
been adopted by the ICAEW that this potentially dangerous
situation (at the time, 60% of the English Institute trainees came
from the Big 5) was defused. On this episode and its aftermath see
E & Y quits English ICA, Accountancy Age, 16 February 2000, p.
1 and ICAEW looks to future with new ACA, Accountancy Age,
4 September 2000, p. 3.
79
These include for instance the Transnational Auditors Com-
mittee, which comprises one representative of each Big 4 ?rm and
one of Grant Thornton, and which sits o?cially on the
International Auditing and Assurance Standards Board. Another
example is the European Contact Group. In countries like France
where big multinational ?rms have come up against hostility
from local practitioners to the point of never being able to control
professional institutes, establishment by these ?rms of parallel
structures is vital. The Comite´ Arnaud Bertrand (after the name
of a deceased KPMG partner), for instance, was created in the
early 1990s by the French representatives of the (then) Big 6 and
those of leading French audit ?rms such as Mazars and Salustro
Reydel.
80
Professional associations thus form an instrument of power in
the hands of the Big 4 rather than the scene where their power is
exerted.
81
‘‘People such as clerks, women and black people are impor-
tant in an analysis of professional formation as they indicate how
the boundaries of the accounting profession are constructed and
re-constructed – which groups are excluded and which allowed to
participate as legitimate accountants.” (Cooper & Robson, 2006,
p. 421)
C. Ramirez / Accounting, Organizations and Society 34 (2009) 381–408 405
was imposed on the practising membership. The dis-
tance between the centre and the periphery of the
Institute was then measured by a means of assessing
professional practice, and this measurement was
associated with moral judgement. In a sense, the
implicit – the hierarchical structure – had become
explicit, and therefore needed to be explicated.
This process of explicating what small practitio-
ners were and how they could ?t into the profes-
sional world (which led to rede?nition of their
identity as business advisers) left scope for diverging
representations to develop. And sure enough, the
last period discussed in the paper, when the anger
and resentment that had grown among small profes-
sionals was su?cient to spur collective action, saw
the creation of the SPA (the Small Practitioners
Association) by sole practitioner Peter Mitchell.
His association, established in 1996, had enrolled
around 1500 members by the beginning of the
2000s (compared with the 14,000 ICAEW sole prac-
titioner members at that time). The SPA cam-
paigned on issues such as the abolition of small
companies audit (in favour) and the introduction
of self-assessment procedures by the Inland Reve-
nue. When I interviewed him, Peter Mitchell, speak-
ing as the representative of the SPA, described the
ICAEW General Practitioner Board in the follow-
ing terms:
The Practitioner Board was what we would
slightly critically call a ‘‘talking shop” as it acted
as a forum to try and take the views forward to
see if other areas in the institute might provide
a service to small practitioners. We did attempt
to work with the board in the early months of
our existence. What we found was that it was a
talking shop. It had actually no real executive
impact or power. It was like a Hollywood ?lm
studio, a Boulevard with all the front of the
shops, and behind them nothing. So it took us
all the year 1997 to ?nd out that all this was just
a fac ßade and had no real clout. And you would
also say that the people that were directing the
practitioner board were not that closely
associated with the small ?rms, because the small
practitioner board is a span of the small practi-
tioners by size.
The interesting point in Mitchell’s comments is
that although he contests the operations by which
the ICAEW has tried to set itself up as representa-
tive of small practitioners, he does not deny the
Institute its status as a macro-actor. The goal of
the SPA (at the time I interviewed Mitchell) was
not to turn his association into the Chartered Insti-
tute of Small Practitioners. His plans were rather to
lobby the Council and have as many members as
possible elected to it. Mitchell probably understood
all too well that it was not in his interest, nor more-
over in his power, to grow as a macro-actor. At the
end of the day, it might seem surprising that both
ends of the practitioners’ world are committed to
staying in the ICAEW, even though they feel that
the Institute does a poor job of defending their
interests. But while the Big ?rms can use the profes-
sional association as an instrument, the small prac-
titioners depend on that instrument to represent
them. Small practitioners’ membership of a body
which comprises the biggest and the smallest ?rms
is ultimately both the source of their pride and the
source of their serfdom.
Acknowledgements
The author wishes to thank David Cooper, An-
thony Hopwood, Peter Miller, Michael Power and
the two anonymous reviewers for their advice and
suggestions. The ?nancial support of the author’s
research by the Institute of Chartered Accountants
in England and Wales’ Chartered Accountants
Trustees Limited and by the Fondation HEC is also
gratefully acknowledged.
Sources
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England and Wales (Milton Keynes)
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AN-AW, AX-BE, BF,BG, BI, BJ (1970–1999).
District Societies Committee Minute Book A-F
(1938–1986).
District Societies – Meetings with Council Min-
ute Book (1970–1976).
General Practitioner Board Minute Books J-Q
(1990–1993).
General Practitioner Board Minute Books R-T
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General Practitioner Board Minute Books L-Q
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Small Practitioner Advisory Committee Minute
Book D1 (1976–1980).
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Michael
Dunham
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practitioner
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London, one
interview of
1hour and 30
minutes
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Fulton
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of the G.P.B.
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London, one
interview of two
hours
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Gompels
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and small
practitioner
(London area)
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London, one
interview of two
hours
Alan
Hubbard
Member of the
G.P.B. and small
practitioner
(Thames Valley)
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London, one
interview of one
hour
John
Malthouse
Head of the
G.P.B. and small
practitioner
(Liverpool)
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London, two
interviews of one
hour
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Mitchell
President of the
Small
Practitioner
Association
February 2000,
Hammersham,
one interview of
two hours
Alan Taylor Director of
Chartac
Advisory
Services
May–June 1999,
Milton Keynes,
two interviews of
one hour
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