Description
During the period of total war and its aftermath, profound changes occurred In the socio-cconomic and
political fabric of Britain. In the face of fundamental change and national crisis the multi-organized
accountancy profession was perceived as being archaic and demands emerged for the reform of its
institutions. The paper discusses the attempt to co-ordinate the profession during the 1940s in the
context of the wartime discourse on reconstruction. The analysis is conducted within a paradigm
appropriate to the period and locale of the subject: British corporatism. It Is revealed that a peak
organization to reprexnt the profession before central government was successfulry instituted in the
form of a Coordinating Committee.
Accounting, OrganlzatioonF and Sodefy, Vol. 20, No. 6, pp. 467-503, 1995
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CORPORATISM AND STRUCTURAL CHANGE IN THE BRITISH ACCOUNTANCY
PROFESSION, 1930- 1957*
STEPHEN P. WALKER
University of Edi nburgh
and
KEN SHACKLETON
University of Glasgow
Abstract
During the period of total war and its aftermath, profound changes occurred In the socio-cconomic and
political fabric of Britain. In the face of fundamental change and national crisis the multi-organized
accountancy profession was perceived as being archaic and demands emerged for the reform of its
institutions. The paper discusses the attempt to co-ordinate the profession during the 1940s in the
context of the wartime discourse on reconstruction. The analysis is conducted within a paradigm
appropriate to the period and locale of the subject: British corporatism. It Is revealed that a peak
organization to reprexnt the profession before central government was successfulry instituted in the
form of a Coordinating Committee. However, an attempt by the Committee to unify the profession
behind legislation to secure a legal monopoIy of public practice failed due to: the inappropriateness of
the constitutional structures of the participant organizations; their inability to subsume particukist
agendas; and, a faihxe to comprehend the enhanced power of government and mandarin civil servants
in the corporatist state. Despite its Inability to achieve its principal objective of registration, the co-
ordination movement resulted in structural changes to the British accountancy profession which have
endud since the 1950s.
It seems to me In the broad view that there are many
sion. Until the 1930s the organization of the
people who are using the War to try and make
proposals and break down barriers that they would
not have dared to do before Games M. Davies, Presi-
dent of the Glasgow Institute (IAAG), 16.8.1942, ICAS,
121/1/l, dot. 32).
The Second World War and the years of post-
war reconstruction were a formative period in
the history of the British accountancy profes
. _
profession was characterized by the increasing
proliferation of institutions. From the late
1930s concerted attempts have been made to
integrate the diffuse array of accountancy orga-
nizations. Here, the co-ordination movement of
the 1940s and 50s is analysed as a response to the
wartime state which necessitated alterations in
the institutional structure and behaviour of
l The authors gratefuRy acknowledge the financial support of the Scottish Committee on Accounting History of The
Institute of Chartered Accountants of Scotland. We are Indebted to A. J. Colquhoun, P. W. Johnston and Mrs A. Rose,
the Chief Executives and Secretaries of ICAEW, ICAS and ACCA, respectively, for access to records and permission to quote
from them. Thanks are also due to Richard K. FIeischman, Tom Lee, Paul J. Miranti, Christopher Napier and the anonymous
referees for their most constructive comments on earlier drafts of this paper.
468 S. P. WALKER and K. SHACKLETON
those, such as organized accountants, who were
engaged in the collective advancement of
interests.
The paper is responsive to the advancing
literature on the relationships between
accounting and the state (Miller, 1990) and, in
particular, the profession-state axis (Johnson,
1972; Chua & Poullaos, 1993). Further, it seeks
to build on previous historical studies which
have examined how accounting, the functions
of accounting practitioners and the linkages
between accounting institutions and the state
have responded to rapid socioeconomic
change and crisis in the form of total war
(Loft, 1986, 1994; Miranti, 1986; Armstrong,
1987; Gallhofer & Haslam, 1991).
Organizational change in the British accoun-
tancy professon during the Second World War
and in the period of post-war reconstruction
are analysed within the corporatist theory of
the state: an approach utilized by previous wri-
ters to examine state-profession relationships
and accounting regulation (Puxty et al ., 1987;
Cooper et al ., 1989; Richardson, 1989). In this
paper we draw principally on Middlemas’s
(1980, 1986) discourse on “corporate bias”
-
a diluted form of corporatism derived from
an analysis of British political history during the
20th century.
Although the ultimate object of the co-ordi-
nation movement - registration by the licen-
sing of “public accountants” - was not
achieved, its activities are crucial to an under-
standing of significant events in the history of
the profession during the immediate post-war
period such as the professional auditing provi-
sions of the Companies Act, 1947, the forma-
tion of The Institute of Chartered Accountants
of Scotland (ICAS) in 1951 and the absorption
of the Society of Incorporated Accountants and
Auditors (SIAA) by the chartered societies in
1957. The latter institutional changes secured
a degree of organizational integration which
has not substantially increased despite con-
certed efforts most notably in 1970 and 1989
(Boys, 1994, pp. 13-14).
The coordination movement has received
scant attention in the professionalization litera-
ture when compared with the salient events to
which it directly and indirectly gave rise. The
official histories of the professional organiza-
tions concentrate heavily on the contribution
of their members and institutes to the military
and civil effort when describing developments
during the 1940s. The histories of the English
(Howitt, 1966) and Scottish (ICAS, 1954;
McDougall, 1980) chartered societies barely
mention the coordination movement though
they contain discussion of the mergers of
1951 and 1957. More voluminous accounts of
co-ordination measures may be found in the
histories of the Irish Institute (Robinson,
1964) and the Incorporated Society (Garrett,
1961) though these tend to have been written
from the narrow perspective of the respective
organization.
Critical commentators have also paid insuffi-
cient attention to developments during the
1940s in explaining the move toward institu-
tional integration after the Second World War.
Macdonald, for example, perceived that from
1930 to 1946 the issue of occupational regis-
tration laid dormant (1985, pp. 217-218).
Willmott, similarly concentrated on the culmi-
nation of the coordination movement - The
Public Accountants’ Bill, 1946 - (1986, p.
568) and paid little attention to the circum-
stances of the early 1940s which gave rise to
it. We contend that the “second phase” (ibid.,
p. 569) of the organization of the accountancy
profession commenced during the Second
World War and not after the merger of the
chartered institutes and the incorporated
society in 1957.
Critical writers have hitherto tended to rely
heavily on secondary sources, and in particular,
the official institute histories when analysing
professionalism in Britain during the mid-20th
century. By contrast, this study is founded on a
variety of primary sources including relevant
journals, government papers and the records
of the principal professional organizations.
The methodological approach adopted is trian-
gulation as applied to qualitative archival
research (Denzin, 1978; Jick, 1979). Multiple
sources pertinent to the same historical
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 469
phenomena were utilized to identify conver-
gences and divergences in the accounts of the
principal actors. Such an approach also
permitted an assessment of source validation
and the illumination of contextual and holistic
perspectives.
A RESUME OF PROFESSIONAL
ORGANIZATION, 1853-1930
The institutional history of the British
accountancy profession to the mid-20th cen-
tury has been variously described as a process
of “exclusion, segmentation and merger”
(WJillmott, 1986, p. 566) and as “creation,
amalgamation and fragmentation” (Edwards,
1989, p. 277). The reasons for such descrip-
tions are apparent when the organizational
history of the profession is sketched.
From 1853 to 1879 the precursor organ-
izations of the chartered profession were
constituted primarily on a local basis in the
major legal, commercial and manufacturing
centres of Edinburgh and Glasgow (1853)
Aberdeen (1866) Liverpool and London
(1870), Manchester (1871) and Sheffield
(1877). During the 1880s and 1890s the need
to assert or defend collective professional sta-
tus resulted in schemes of national organization
(The Institute of Chartered Accountants in
England and Wales (ICAEW) in 1880, and the
Institute of Chartered Accountants in Ireland
(ICAI) in 1888) (see How&t, 1966; Robinson,
1964) or institutional cooperation (as in
Scotland during the mid-90s) (see Kedslie,
1990; Walker, 1991; Shackleton, 1995). How-
ever, the closure devices imposed by the early
chartered societies encouraged the formation
of second tier organizations of excluded practi-
tioners such as the Scottish Institute of Accoun-
tants (1880), the Society of Accountants and
Auditors (1885) and the Corporation of
Accountants Ltd (1891). The chartered socie-
ties’ close definition of public practice pre-
vented the admission to the established
societies of accountants engaged in new speci-
alisms (such as public finance and costing) thus
resulting in the institution of separate organiza-
tions of corporate treasurers and municipal
accountants (1885) and, later, of cost and
works accountants (1919).
A further expansion of second tier organiza-
tions in the first decade of the 20th century
(the Institute of Certified Public Accountants,
1903; the London Association of Accountants,
1904; the CentraI Association of Accountants,
1905) was boosted by the Finance Act, 1903
which included provisions which liberalized
taxation work (Car-r-Saunders & Wilson, 1933,
p. 2 14). Following the cessation of military con-
IIict in 1918 further organizations of excluded
and specialist accountants were constituted in
relation to Poor Law administration, auditing,
and corporate, statistical and international
work. In 1930 there existed at least 17 associa-
tions representing the profession. This “bewil
dering multiplicity of associations” (ibid., p.
213) was at variance with the increasing con-
centration of industry and alRed organizational
structures during the inter-war period (Beer,
1965, pp. 292-296).
As a result of its institutional fragmentation,
the accountancy profession in Britian has been
characterized by internecine dispute and an
inability to subsume perceived organizational
status differentials in order to achieve regula-
tion of the occupation by the state particularly
in the period from the 1890s to 1930. Nume-
rous attempts were made by the accountancy
organizations to obtain state recognition by
means of registration bills between 1891 and
1911 (MacdonaId, 1985; KedsIie, 1990;
Kirkham & Loft, 1992). All efforts failed due
to the inability of the accounting bodies to
agree on any one measure and the ease with
which contentious legislation for the profes-
sion, devoid of government support, could be
successfully opposed.
By the inter-war years, the legacy of the for-
mation of a multi-organized occupation and of
attendant episodes of inter-organizational hosti-
lity, did not auger weII for attempts to secure
the unification of the British accountancy pro-
fession. There had been a number of sources of
institutional conflict. The equating of public
470 S. P. WALKER and K. SHACKLETON
practice with professi onal accountancy
ensured that the independent, fee-earning
chartered accountants (who had been trained
in firms offering accountancy services to the
populace) looked askanse at the occupational
claims of the dependant, salary-earning cost
and municipal accountants (Loft, 1986, p.
166). Relations between organizations of char-
tered accountants and those who had
attempted to intrude on their status and mar-
ket dominance had been periodically embit-
tered since the late 19th century. In
particular, the challenges presented to the
Scottish chartered societies by the Corporation
of Accountants Ltd (an antecedent organization
of the certified accountants) during the 1890s
and 1900s left deep wounds (Walker, 1991).
Such encounters ensured that certified accoun-
tants were to be suspicious of the particularist
motives of the senior bodies and encouraged
their adherence to a vision of the profession
organized on a democratic and progressive
basis. As will be illustrated later, their exclu-
sion from earlier legislative attempts to regu-
late accountancy practice was to imbue the
certified accountants with a cynical disposition
towards the reasons why, in the 1940s they
were unexpectedly called in from the cold to
participate in discussions on the future of the
profession.
Among the chartered societies, unanimity
was seldom in evidence on the question of
the organization of the profession. The Irish
were marginalized on account of their size,
location and the ambiguity surrounding their
status as a U.K.-based institution. The Scats
were often distrustful of the intentions of their
numerically superior and more powerful
English counterparts and had become wary of
reforms emanating from London (Walker,
1995). Past attempts to achieve or maintain
market control via registration or the protec-
tion of credentials had been conducted sepa-
rately by the chartered organizations in
England and Scotland (Kedslie, 1990, pp.
249-261). At the turn of the century a scheme
to ensure the cooperation of chartered accoun-
tants in Britain was aborted (Shackleton, 1995).
Furthermore, the persistence of jealously
guarded status differentials between the socie-
ties in Edinburgh, Glasgow and Aberdeen was
not always conducive to concerted action by
Scottish chartered accountants (ibid.).
There was, however, some commonality of
interests on the question of the future structure
of the profession between the two largest
accountancy organizations in Britain by the
inter-war years. Relations between the ICAEW
and the SL4A had been gradually improving
such that in 1909 the two organizations had
jointly prepared a registration Bill which pro-
gressed to the stage of passing its Second Read-
ing (Macdonald, 1985, p. 549).
During the 1920s differences between the
accountancy organizations reemerged when a
considerable number of Corporation Bills were
presented to Parliament. One of the issues
which often arose from the legislation was elig-
ibility to conduct local authority audits. It was
almost a matter of course that one body of
accountants would object to either the fact
that they had been omitted or the inclusion
of a competitor body. However, during the
passage of the Chester Corporation Bill in
1929, the Chairman of the Local Legislation
Committee of the House of Commons com-
mented on this issue and the Select Committee
on Local Legislation recommended that the
accountancy profession:
be placed on a unified basis similar to that of other
learned professions by the incorporation of a represen-
tative body,.having control over the whole profession,
and keeping a register in which should be inscribed the
names of all fully qualified members of the professsion
(Special Report, British Parliamentary Papers, 1928-9,
vol. iv, p. ix).
The implications of the report for the poten-
tial recognition of second tier organizations
induced the established societies to request a
departmental enquiry. Following the opposi-
tion of the chartered bodies in particular, the
Goschen Committee reported in 1930 that
there was no public demand for a scheme of
registration (Registration of Accountants,
Bri ti sh Parl i amentary Papers, 1929-30, vol.
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 471
viii). Since the 193Os, and particularly from the
early 194Os, further attempts have been made
to integrate the disparate organizations of
accountants. These efforts have been largely
motivated by, and conducted in the context
of, a radically altered set of economic, social
and political infrastructures. In particular, the
increasing intervention of the state since the
1930s and the consequent centralization of
governmental institutions and power have
resulted in demands from the state and from
the accountancy organizations for the profes-
sion in Britain to speak with one voice.
THE EXPANSION OF THE STATE IN
MATURE INDUSTRIAL SOCIETY
In mature urban-industrial societies the state
has become increasingly interventionist and
the broadening scope of interference has
been attended by the enhanced power of gov-
ernmental institutions at the centre of policy
making and administration. The history of the
expansion of state activity in economic man-
agement and the provision of public services
in Britain has been extensively tracked (Hill,
1976, pp. 16-44; Hobsbawm, 1969, pp. 225-
248; Westergaard & Resler, 1976, pp. 171-179,
199-203). Perkin (1989) has noted that govern-
ment expenditure as a percentage of GNP
increased from 12.7% in 1910 to 49.3% in
1975, employees of government rose from 7%
of the labour force in 1931 to 26% in 1973 and
that this activity was financed by substantial
increases in taxation (pp. 315-316).
Although the Great War necessitated sub-
stantial control by the state of scarce resources
(see Loft, 1986, pp. 143-144) the retreat from
the mid-19th century minimalist state and the
advance from late Victorian social liberalism
was particularly marked during the inter-war
period (Stevenson, 1986, pp. 59-62). The struc-
tural problems revealed by severe depression
encouraged the theoretical development and
advocacy of managed, planned capitalism as
an alternative to failed orthodox economic pol-
icy (ibid., pp. 63-66). The protection of strate-
gic industries became a concern of government
particularly during the 1930s (ibid.). In accor-
dance with the contemporary “rationalization
movement” which stressed the economic
advantages of concentration (see Hannah,
1976, pp. 29-44; Armstrong, 1987, pp. 425-
426), governments encouraged or compelled
industrial reorganization, coordination and
amalgamation in the public utilities and
depressed industries (Musson, 1978, pp. 288-
96; Hobsbawm, 1969, p. 242). Government
intervention increased considerably from the
1940s to the 1970s in order to implement
Keynesian demand management, the welfare
state and nationalization.
INTEREST GROUPS AND THE
INTERVENTIONIST STATE
Several competing paradigms have been
developed by sociopolitical theorists to
explain the nature and distribution of power
in modem industrial capitalist societies. Marx-
ian, elitist, pluralist and corporatist perspec-
tives also encompass the organizational and
behavioural implications of the expanding
role of the state for interests such as profes
sional groups which are compelled to greater
participation in the increasingly centralized
policy-making process in order to defend or
enhance their economic, social or political
position (McLennan, 1984; Ham & Hill, 1984,
pp. 26-42).
Although Marxists consider that state inter-
vention is designed to assist capital accumula-
tion, maintain political domination or to act as
a palliative to working class agitation (Hall,
1983, p. 364) it is recognized that the increase
in state power and activity under modem capit-
alism has ensured that it is the foci for compet-
ing demands. Miliband introduced his seminal
work thus:
More than ever before men now live in the shadow of
the state. What they want to achieve, individually or in
groups, now mainly depends on the state’s sanction and
support. But since that sanction and support are not
472 S. P. WALKER and K. SHACKLETON
bestowed indiscriminantly, they most, ever more
directly, seek to intluence and shape the state’s power
and purpose, or to try and appropriate it altogether. It is
for the state’s attention, or for its control, that men
compete; and it is against the state that beat the waves
of social conflict (1973, p. 3).
Marx’s recognition that the successful
achievement of objectives was more likely
when advanced by united collectivities with a
cohesive sense of group (class) consciousness
is also pertinent when applied to the interac-
tion of particular occupations in the political
arena (Krause, 1971, pp. 84-85). More recent
neo-Marxist perspectives have stressed the
political debility of atomized individuals and
the comparative effectiveness of centralized
and coordinated working class movements
(Therborn, 1986, pp. 219-221).
Modern elite theorists such as Mills have illu-
strated that to achieve influence with those in
command positions, interest groups must
access the centres of national policy making,
become enmeshed in the all-powerful organs
of executive government; in short, become
part of the vested interests. Those groups
which represent specific national interests
and which are coordinated and coherent are
more likely to achieve successful outcomes
than those which are organizationally scat-
tered, disjointed and decentralized (1956, pp.
258-268).
American pluralists, such as Truman (1951)
and Dahl(l956, 1975) draw on Weberian con-
cepts of the multidimensionality of power and
the geocentric position of the state at the inter-
face of contending political pressures (Held,
1983, p. 39). Association and collective repre-
sentation are necessary as individuals by them-
selves have minute intluence in democratic
politics (McLennan, 1984, pp. 82-83). The
state is a marketplace - the focus of pressure
from competing representative groups each
seeking to protect or promote a specific func-
tional interest.
Elite pluralists acknowledge that certain
pressure groups secure disproportionate influ-
ence with the state on the basis of organiza-
tional, informational, economic or political
advantages. The successful achievement of
group objectives is thus dependent on the
acquisition of superior resources and institu-
tional attributes (such as representation by
coherent organizations) which enhance access
to decision makers and increases the extent to
which group demands are recognized.
Although the English variant of political plur-
alism (as advocated by writers such as Cole,
Figgis and La&i during the inter-war period)
was essentially anti-state centralist and anti-
collectivist, the exigency of the synthesization
of inclusive, self-governing and democratically
organized associations under a system of multi-
charmelled functional representation was
recognized (see Hirst, 1989; Nicholls, 1975).
Cole elucidated a “principle of coordination”
thus:
If neither any single functional association nor the pee
ple itself can be the normal co-ordinating agency in a
functionally organized society, only one possibility
remains. The co-ordinating body must not be any single
association, but a combination of associations, a federal
body in which some or all of the various functional
associations are linked together (quoted in Hirst,
1989, pp. 101-102).
The extent to which pluralism featured in
British politics in the post-war period in
response to the interventionist state was com-
prehensively analysed by writers during the
1960s such as Beer (1965) and Eckstein
(1960). Beer identified a “new group poli-
tics”, a form of institutionalized pluralism char-
acterized by an increasing tendency toward
functional rather than party representation.
The managed economy requires governments
to gain the consent and cooperation of power-
ful producer groups “representing the main
sectors of the economy: trade unions, trade
associations, and professional organizations”
(1965, p. 320).
Beer asserted that the interventionist state
offers challenges to the producer group. If it
is to take advantage of its potentially powerful
position in the managed economy the group
must mobilize, and have “a capacity for unified
decision-making and action” (ibid., p. 332)
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 473
through the medium of a national rather than a
fragmented organizational structure. The
power rewards of greater institutional cohe-
sion and concentration within the producer
group is illustrated by the extent to which
British governments have integrated trade asso
ciations and trade unions into the administra-
tive and policy making apparatus of the state
since the 1940s - groups which have been
encouraged to consolidate in order to “speak
with one voice” (ibid., p. 337) to government.
Beer’s identification of the role of the major
producer groups within a larger system of func-
tional representation lends some support to
those who describe power relations in the
modern industrial state as corporatist (see
Grant, 1985; Williamson, 1985, 1989; Cawson,
1986). Neo-corporatist theory was developed
during the 1970s in response to the limited
ability of the pluralist and Marxist perspectives
to explain the complex interactive relationship
between centralized organized interests and
the modern state (Schmitter, 1974; William-
son, 1989, pp. l-8). The nature of corporatism
has been discussed in the critical accounting
literature (Cooper et al ., 1989; Richardson,
1989). The most oftquoted definition of
“ideal” corporatism is Schmitter’s:
Corporatism can be defined as a system of interest
representation in which the constituent units are orga-
nized into a limited number of singular, compulsory,
noncompetitive, hierarchicalIy ordered and function-
ally differentiated categories, recognized or licensed
(if not created) by the state and granted a deliberate
representational monopoly within their respective cate-
gories in exchange for observing certain controls on
their selection of leaders and articulation of demands
and supports (1974, pp. 93-94).
Cawson has provided a definition of neo-
corporatism which also highlights the repre-
sentative and implementational functions of
organized groups:
Corpomtism is a specific sociopolitical process in
which organizations representing monopolistic func-
tional interests engage In political exchange with state
agencies over public policy outputs which involves
those organizations in a role that combines interest
representation and policy implementation through
delegated SeIf-enforcement (1985, p. 8).
Pluralistic processes of interest articulation
involve representation by a large number of
competing interests who lobby for favourable
outputs from the state. By contrast, under cor-
poratism a smaller number of noncompetitive
organizations exist not only to represent func-
tional interests but also to participate in the
implementation of policy decisions. The latter
is facilitated by the exercise of disciplinary
powers by the leaders of the organization. As
the state has become more heavily involved in
economic management, corporatist relation-
ships developed between governments and
the principal economic interests in advanced
capitalist society, primarily organized capital
and labour.
Studies of the prevalence of macro-corpotat-
ism in western nations reveal that corporatiza-
tion in Britain has been comparatively weak
(see Williamson, 1989, pp. 148-15 1). Histori-
cal investigations also show the partial and tran-
sitory nature of corporatist tendencies in
Britain. Beer adopted the term “quasi corporat-
ism” (1956, p. 7) Crouch has applied the term
“bargained corporatism” to post-war relations
between governments and organized capital
and labour (1979) and later noted the oscillat-
ing and experimental character of British cor-
poratism and its conspicuousness in periods of
world war (1986, pp. 208-209).
Middlemas contended that the system of
government in Britain from the 1910s to the
mid-1960s was characterized by an informal
“corporate bias” (1980, p. 383) in which
employer associations, trades unions and other
groups assumed the status of “governing insti-
tutions” as opposed to mere pressure groups
(ibid., p. 373). The tripartite relationship
between the state and representatives of orga-
nized capital and labour (which was induced
by industrial crisis in 1911- 1914 and given
further impetus by the need for the control of
scarce resources during war) explains the rela-
tive political harmony which persisted in
Britain after 1918 when compared with the
474 S. P. WALKER and K. SHACKLETON
dislocation experienced ln some other
European countries (ibid., pp. 18, 376).
Governing institutions enter into interdepen-
dent and cooperative relationships with
government, have functional responsibilities
bestowed upon them, are rewarded with pre-
ferential access to policy makers, and thereby
become an integral part of the extended state.
The creation of governing institutions is
encouraged as the state is “avid to admit repre-
sentative bodies to its orbit rather than face a
free-for-all with a host of individual claimants”
(ibid., p. 20). Hence, in industrial politics, cen-
tralized bureaucracies to represent labour (The
General Council of the Trades Union Congress
in 1921) and management (the Federation of
British Industries in 1916) were instituted
(Middlemas, 1986, pp. 3-5). The promotion
of powerful representative interest groups to
the status of governing institution is dependent
on the acquisition of power enhancing traits
such as size of membership, organizational
cohesiveness, central control, institutional col-
laboration, the acquisition of specialist skills,
unified adherence to national objectives, and
the ability of a group to be of service to the
government (ibid., pp. 9-10).
For social historians such as Perkin (1989)
informal corporatism is the institutional frame-
work within which a professional society based
on “career hierarchies of specialized occupa-
tions” (p. 2) replaced a class society in Britain
from the later inter-war years. In a professional
society, corporate organization has been
encouraged by the need of occupational hier-
archies to compete with one another ln the
struggle for income, power and the attention
of the interventionist and distributive state
(ibid., p. 9). The collective organization of pro-
fessional interests is necessary in order to
advance occupational status and control
(ibid., p. 288).
The theoretical perspectives outlined above
recognize that the interventionist state is an
arena for competition between contending
interests who input demands and seek favour-
able outputs (Levine, 1990). The approaches
are consistent in their recognition that advanta-
geous outcomes are more likely to be secured
when presented by unilied representative orga-
nizations. The evidence suggests however, that
the most appropriate framework for the analy-
sis of the state-profession relationships and the
behaviour of accountancy organizations in
Britain during the period under study is corpor-
atism and in particular, the diluted, U.K.-speci-
fic variant derived from historical analyses such
as those of Beer, Middlemas and Perkin.
Corporatism is not a cohesive concept
(Williamson, 1989, pp. 187-202). A lack of defi-
nition has resulted in disputes concerning
issues such as whether corporatism encom-
passes bilateral relations between, for exam-
ple, the state and professional organizations
or is restricted to tripartism involving the state
and the interests of capital and labour (Grant,
1989, p. 32). The theoretical weaknesses of
corporatism have induced critical accounting
commentators to utilize it in forms modified
by, or in combination with, for example, the
Offe-Habermas theory of the state (Cooper et
al., 1989) and Gramsci’s concept of hegemony
(Richardson, 1989). In a similar vein this study
appropriates as its framework, corporatist mod-
els tempered by the results of historical inves
tigations pertinent to the time and locale of its
subject matter.
It will be shown that many elements of
Middlemas’s theory of corporate bias are
germane to an understanding of the interaction
between the accountancy profession and the
state and the relationships between the organi-
zations of accountants during the 1940s and
50s. Not only does Middlemas’s analysis hlgh-
light the enhanced receptiveness of govern-
ments to the demands of well-organized
collective groups, it also reveals the multi-
farious nature of patterns of institutional beha-
viour and the extent to which corporate bias
can be detected in areas other than industrial
politics (1980, p. 374). Middlemas’s work also
reveals: the diversity of interest/state relation-
ships; the determinants of the timing of a func-
tional group’s metamorphosis to the status of
governing institution (1986, p. 10); the poten-
tial of such transformation for the creation of
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 475
new conflicts between the governing institu-
tion and its constituents (1980, pp. 21, 372-
373); and, the significance of the maintenance
of an interdependent relationship between the
governing institution and the state. Also high-
lighted are the position of deviants and mino-
rities excluded from the corporate bargaining
process (ibid., pp. 19-20, 376); the significance
of departmental civil servants in the process of
political bargaining (1986, p. 1); and, the infor-
mal, malleable and covert nature of the inter-
action between state agencies and governing
institutions which is only revealed by thorough
historical investigation (1980, p. 19).
INTERVENTION, CORPORATE BIAS AND
THE RECONSTRUCTION MOVEMENT,
1939- 1942
The extent to which producer groups were
advantaged by the institution of centralized and
coherent organizations was to be recognized
by the disjointed accountancy profession dur-
ing a climacteric in the history of state interven-
tion and corporate bias in Britain: the Second
World War.
The idea that the Second World War induced
a socioeconomic revolution has recently been
subject to some revision among historians
(Smith, 1986, pp. viii-x). Few dispute, how-
ever, that the exigencies of war resulted in a
substantial shift towards dynamic state control
and regulation as indicated by an increase in
government expenditure from 51 blllion in
the year before the outbreak of conflict to
a.2 billion ln its linal year and a doubling in
the number of civil servants (Perkin, 1989, pp.
407-409). The discourse on the concept of a
state managed economy and government
responsibility for public welfare which had
emerged during the later Inter-war years was
necessarily put into practical effect on a sub
stantial scale when the realities of total war
became apparent (Stevenson, 1986, pp. 68-
69): “Rearmament, bombing, evacuation, food
rationing, military and industrial conscription
- all gave an existential reality to the organic
conception of society in a way that had never
been achieved by abstract analysis” (Harris,
1986, p. 236).
From the end of 1940 the extent to which
‘governing institutions’ had become engaged in
a ‘political contract’ with the wartime state to
organize and control manpower, consumption,
agriculture, manufacturing and finance was
such that Britain fell “only marginally short of
the corporate state” (Middlemas, 1986, p. 44).
McCrone et al . have concurred that the Second
World War “gave a massive boost to ‘corporate
bias’ in Britain, for the wartime government
actively sought to bring labour, industry and
the City round the governing table” (1989, p.
47). In particular, the agency and advisory rela-
tionships between the trades unions and the
Ministry of Labour, employers organizations
and the Ministry of Supply, and financial inter-
ests and the Treasury were crucial to the mili-
tary and civil effort and provided participating
groups with unparalleled access to public pol-
icy making institutions (Middlemas, 1986, pp.
17-45; Perkin, 1989, pp. 321-324). Represen-
tatives of professional accountants were also to
develop a similar series of associations with
several government departments during the
war.
Changed attitudes towards the role of the
state, its obligations to the citizenry and the
participatory function of representative orga-
nized interests were epitomized in the war-
time reconstruction movement. The discourse
on reconstruction was to culminate in the pre-
paration of official reports on social security,
health, full employment, town planning and
education which became the blueprints for
the consensus politics of the immediate post-
war era (Addison, 1975, pp. 165-189). Under-
lying the plans for a better Britain was “the
new ideology of ‘the middle way’ [which]
spoke always of the rational and centralized
control of resources, and the priority which
must be given to social welfare” (ibid., p. 183).
From an early stage of the conflict and parti-
cularly from the emergency induced by
Dunkirk and the fall of France in mid-1940,
widespread discussion about a new post-war
476 S. P. WALKER and K. SHACKLETON
order developed. As Barnett (1987) has noted:
“while in 1940-41, Winston Churchill and the
nation at large were fighting for sheer survival
in the face of Nazi Germany’s then victorious
power, members of the British cultural elite
had begun to busy themselves with design stu-
dies for a ‘New Jerusalem to be built in Britain
after the war was won” (p. 11). Concern about
reconstruction at a time of military crisis is
explained in the official history of the war as
an attempt to “fuse the will to victory with
aspirations for a better world” (Hancock &
Gowing, 1949, p. 534) and to offer future
rewards for sacrifices made in war. In 1941-
42 reconstruction caught the public imagina-
tion, was the subject of extensive media atten-
tion (Rarnett, 1987, pp. 21-22) and resulted in
the formation of a plethora of reconstruction
committees and reports within and emanating
from, a diversity of public and private institu-
tions ranging from political parties to the
Jockey Club (Harris, 19sG, pp. 236-238;
Calder, 1992, p. 545).
Middlemas has explained the extensive inter-
est in reconstruction thus:
At an exceptionally fluid time, normal barriers to poli-
tical discourse had been lifted; the future was to be
discussed and competed for, in a contest where the
stakes were limited only by external factors, and where
the rules (that this activity was strictly conditional on
the greater business of winning the war) were plain but
simple (1986, p. 47).
In February 1941 a Reconstruction Problems
Committee of the Cabinet was instituted and
was followed by a Ministry of Reconstruction
in November 1943. The Minister who headed
the former from February 1942, Sir William
Jowitt, was to receive the attention of another
group interested in the problems of the post-
war world: professional accountants.
Accountants and reconstructi on
Harris has commented that “An historian
who surveys the wartime literature on recon-
struction is soon struck by the fact that a com-
mon language of visionary patriotism and a
common sense of national unity continued to
mask an immense diversity of values and goals”
(1986, p. 238). A review of the reconstruction
items contained in the major professional
accountancy journals during 1940-42 cont%ms
this perception. Contributors were anxious to
highlight the service which the accountancy
profession could render during and after the
war but generally considered that this could
only be achieved by a potentially self-inter-
ested measure: the unification and/or registra-
tion of the profession. It was asserted in a letter
to The Accountant in March 1942 that “before
accountants allot themselves the role of specia-
lists for curing national ills in the post-war per-
iod, should they not first of all learn to speak
with one voice, and that a voice of authority”
(p. 106). The disunity of the profession was
anomalous to the organic cohesion of a popu-
lace united by a common threat of Nazi tyr-
army. The time was ripe for the professional
organizations to place national duty above
petty snobbery: “it may be hoped that the shar-
ing of common problems, caused by war con-
ditions, will produce a sense of solidarity in the
profession which will be of tangible benefit
afterwards” (The Accountant’s Magazi ne,
1941, p. 412; see also Z&e Accountant, 1942,
p. 106, The Accountant’s Magazi ne, 1942, p.
211).
Discussion about the structure of the accoun-
tancy profession was also encouraged by a mea-
sure of integration during the period of the
discourse on the profession’s role in post-war
society. In March 1939 the London Association
of Certified Accountants Ltd and the Corpora-
tion of Accountants Ltd amalgamated as the
Association of Certified and Corporate Accoun-
tants Ltd (ACCA). In the autumn of 1941 the
Institute of Certified Public Accountants joined
the new association. The merger resulted in
E??e Accountant re-asserting the need for gov-
ernment departments (who were assuming
substantially greater control of resources) to
be approached by a less confusing array of
accountancy organizations and confirming
that “The present war has illustrated only too
clearly how essential it is that the profession
should be able to speak and act as an organised
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 477
whole” (1941, p. 207). The prevailing mood
was aptly summarized in a report of the Policy
Committee of the ACCA in May 1943:
Today there is a change of attitude towards the subject
of organising the profession, due no doubt to a change
in outlook in regard to social and economic reconstmc-
tion. There is a demand - and it is a very popular
demand at the present time - for the creation of a
new pattern of living from which the defects of the
present pattern shall be eliminated (KAEW, MS28435,
Box 1).
INTERMEDIATION: GOVERNMENT AND
THE ACCOUNTANCY PROFESSION, 1939-
1957
Central to corporatist analysis is the concept
of intermediation: interest associations not only
assume representative roles but are also
accorded regulatory and public policy imple-
mentation functions by government (William-
son, 1989, pp. 98-118). A gradation of
regulatory and implementational structures
may be encompassed within corporatism. The
state may devolve total responsibility for the
discharge of policy on an interest group -
the latter becoming a direct agent of the
state. An alternative relationship is the estab-
lishment of “private interest governments” in
which producer groups assume a self-regula-
tory, quasi-public status (Streek & Schmitter,
1985; Cooper et al., 1989). Weaker forms of
corporatist intermediation border on pluralism
and include representation on state regulatory
agencies; the integration of interests in policy
formation processes (Schmitter, 1982), or
merely the existence of a less tangible “spe-
cial relationship” between organized func-
tional interests and the state (Williamson,
1989, p. 85).
Middlemas’s theory of corporate bias empha-
sises the flexible, cooperative and collaborative
relationships between interest associations and
government in Britain. Governing institutions
are not formally incorporated into the state.
Rather, they are recognized as bargaining part-
ners with privileged access and devolved
functions. The emphasis of corporate bias on
cooperation and the integration of interest
leaders in the political process bears a close
resemblance to the minimal corporatism
expounded by Panitch (1980) and utilized by
Richardson (1989) in his study of accounting
regulation and the profession in Canada.
Accountants and i ntermedi ati on
During the Second World War and the
period of post-war reconstruction, members
of the accountancy profession, became exten-
sively involved in an interplay of mutually
dependent and symbiotic relationships with
the state which ranged from the provision of
expert advice to participation in policy imple-
mentation. The operation of monopolistic and
heavily regulated markets in wartime required
the services of accountants for audit and con-
trol functions.
At the end of 1939 an Accountants Advisory
Selection Panel comprising representatives of
the principal professional associations was
established to recommend practitioners to the
Ministry of Supply who would assist govern-
ment in the development and implementation
of controls on raw materials (me Accountant,
1939, p. 624). Eminent accountants were co-
opted to several government departments in
an administrative or advisory role. During the
first four months of 1940 senior accountants
were appointed as: financial advisers to the
Air Council and the Ministry of Shipping; Dep-
uty Director-General of Statistics at the War
Office; and, Controller of Salvage in the Minis-
try of Supply (ibid., 1940, pp. 2, 377). A past
president of the SIAA was appointed as Con-
troller of Costings at the Ministry of Supply
(Garrett, 1961, p. 212).
Accountants were appointed to Local Price
Regulation Committees, selected as inspectors
to ensure the observance of price orders and
their knowledge of costing and price determi-
nation was enlisted by the Central Price Regu-
lation Committee (ibid., p. 221; also Hargreaves
& Gowing, 1952, pp. 558-559). The Board of
Trade discovered that its staff of 2000 was
insufficient to deal with new responsibilities
478 S. P. WALKER and K. SHACKLETON
in relation to the implementation of wartime
controls. The Board therefore expanded its
complement to 6500 and found the accoun-
tancy profession a particularly fruitful source
of additional administrative personnel (Han-
cock & Gowing, 1952, p. 135).
In common with the representatives of other
occupational associations during the war,
accountants were enlisted by the state to facil-
itate the optimal utilization of the available
supply of labour. From the early stages of the
war a committee of representatives from the
principal accountancy organizations was
formed to liaise with the Ministry of Labour
on the status of accountancy as a reserved
occupation. The Committee also participated
in the compilation of a register of practitioners
who had made themselves available for work in
government departments. Accountants sat on
Reserved Occupation Boards and in May 1941
Pmctising Accountants Committees consisting
of representatives of the professional associa-
tions were established in England and Wales
and in Scotland to assist the Ministry of Labour
in dealing with applications for deferred call-
ing-up and de-reservation following severe
labour shortages in accounting firms (The
Times, 28 May 1941, p. 5; The Accountant,
1941, pp. 74, 402). According to Garrett
(1961) these committees “enjoyed the com-
plete confidence of the Ministry” (p. 213). A
close cooperative relationship between the
profession and the Ministry of Labour was to
subsist throughout the war and culminated in
the participation of accountants in resettlement
and education schemes for ex-servicemen.
Advisory committees and panels comprising
representatives of the professional organiza-
tions were constituted at the request of other
government departments such as the Inland
Revenue and the Board of Trade in 1942-
1943 to consider matters such as the adminis-
tration of Excess Profits Tax, post-war fiscal
policy, business financing and the limitation
of supplies (see SIAA, MS28484/12). Internal
committees were also established within the
institutes for the purpose of advising govern-
ment and monitoring public policy. In June
1942, for example, the ICAEW established a
Taxation and Financial Relations Committee
as a direct response to comments by the
Chancellor of the Exchequer that: “it was
open to expert bodies to confer with the
Inland Revenue with a view to seeing whether
any practical steps within the scope of existing
policy should be taken” (ICAEW, MS28423, p.
2). The Taxation and Financial Relations Com-
mittee was not, however, only to submit
recommendations (via the Council of the
ICAEW) to the Treasury and the Inland
Revenue. The results of its deliberations on
the need for legislation concerning any aspect
of the financial relations between government
departments and the business community were
to be forwarded to relevant ministries (ibid.).
The Taxation and Financial Relations Commit-
tee also established subcommittees on the sub
jects of taxation, post-war finance and costing.
The Costing (Government Contracts) Sub-Com-
mittee was instituted to devise a memorandum
on uniform costing systems for submission to
ministries where it would be used for post-
war industrial planning. Representatives of the
Ministry of Aircraft Production and the Ministry
of Supply consulted the Costing Sub-Commit-
tee on costing problems with the result that
arrangements were made “whereby more of
the work might be undertaken by the Profes-
sion” (KAEW, MS28425, p. 1).
The Co-ordinating Committee
The institution of a peak organization of the
British accountancy bodies to represent the
profession before the organs of central govern-
ment was a manifestation of a confluence of
two developments. Firstly, the collaboration
of British accountants with government during
the early years of the war and, secondly, their
participation in the reconstruction debate. The
formation of government instigated commit-
tees of accountants to consider labour, pricing
and fiscal problems induced a greater degree
of organizational cooperation among the
accountancy bodies (ACCA, Minutes,
28.4.41). Improved access to policy makers
had revealed the significance of making uni-
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 479
fied representations to government. Further,
as the immediate threat to Britain’s security
began to recede ln 1942 reconstruction
came to the fore ln a “broad and rising tide
of New Jerusalemism” (Barnett, 1987, p. 24).
The time was considered ripe for addressing
the complexion of the accountancy profession
in the post-war period.
The formation of a Joint Consultative Com-
mittee of the principal accounting bodies had
been suggested before the Council of the SIAA
during the summer of 1941 and the Council of
the ICAFW had considered the structure of the
profession early in 1942 following the circula-
tion of a pamphlet within the profession enti-
tled “Time We Got Together” (ICAEW,
MS28411/12, p. 315). Following informal dis-
cussions between the Presidents of the ICAEW
(Palmour, who was the Chairman of the Prac-
tising Accountants Committee) and the SIAA
(Witty), the Council of the ICAEW resolved
on 8th July 1942 to discuss “matters generally
affecting the Profession” (ibid., p. 342) with
the SIAA. Thereafter, the President of the
ICAEW also issued invitations to the ACCA
and a prominent Scottish chartered accountant
in London, to attend an informal meeting of
representatives of the accounting bodies on
7th August. It was agreed at the meeting that
the approval of the Councils of the participat-
ing associations should be sought for the insti-
tution of an informal committee (the Co-
ordinating Committee) to consider the co-ordi-
nation of the profession when approaching
government departments (ICAEW, MS28428,
pp. l-2).
The first formal communication between the
accountancy profession and government perti-
nent to organizational coordination occurred
in a contemporaneous development which
related to reconstruction. On 7 July 1942 the
Secretary of the ICAEW wrote to Sir Wllliam
Jowitt’ (the Minister responsible for recon-
struction), in the following terms:
There is a feeling amongst the Members of the Institute
that they would Eke guidance on Post War Reconstruc-
tions. Several of the London Members have asked for a
meeting to be arranged at which Post War Problems
could be discussed (War Cabinet, CAB 117/46, f. 1).
A further exchange of letters set up a
meeting between Jowitt and representatives
of the ICAEW, including its President on 24
September. It had been suggested by Jowitt’s
department that a suitable subject for discus-
sion at the meeting would be cost accounting
and its significance in the context of post-war
industrial organization. Departmental officials
were interested in the accountants’ opinions
on the use of costing as a means of ensuring
efficiency in a noncompetitive environment of
state controlled monopolies (ibid., f. 9). The
civil service minutes of the meeting duly
records lengthy discussion on this topic but
also notes that the Minister “stated his view
that a high standard of accountancy qualilka-
tions should be required after the war from all
in the profession in order that the public
should be assured of expert service” (ibid., f.
16). Jowitt offered his full support for any pro-
posals to establish a high standard of qualitka-
tion if derived from collaboration between the
accountancy bodies.
The official minute does not accord with
reports which emanated subsequently from
the ICAEW representatives present at the meet-
ing. According to their version Jowitt was
poorly briefed on cost accounting and had
put the question directly “Why do you not
put your own house in order? ” (ICAS, 121/l/
1, dot. 32). The Minister was quoted as saying
that accountants should get together and reach
’ Wiiiiam Jowitt was to prove a supportive partner in the effort to coordinate and regulate the accountancy profession. His
interest in the profession is Likely to have stemmed from his involvement in the Royal Maii Steam Packet Ltd Case of 193 1
(Edwards, 1989, pp. 148-155) when he was Attorney-General. Jowitt was to write that “Of aii the cases with which I have
been concerned, none has ever caused me more anxiety” Gowitt, 1954, p. 104). He was known to hold strong views on
accounting, auditing and public propriety (Heuston, 1987, p. 83).
480 S. P. WALKER and K. SHACKLETON
agreement as to who is an accountant (ICAS,
13/3, p. 453), that he would be prepared to
pilot relevant legislation and that if the profes
sion failed to address the issue then the govern-
ment would. During the later protracted
negotiations concerning the structure of the
profession, the accountants’ version of the
meeting with Jowitt was further refmed in
order to advance the cause of the most fervent
advocates of institutional reform. By February
1943, the President of the ICAEW, Palmour,
was minuted as stating to the representatives
of the Scottish chartered societies that “the
question of costing was never raised” (ICAS,
121/1/l, dot. 24).
When the informal committee of representa-
tives of the accountancy associations recon-
vened on 5 October 1942, its chairman (also
Palmour), utilized the alleged comments of
Jowitt as evidence of official support for the
institution of more than a peak organization
of accountants with which to interface with
government. Palmour reported that Jowitt had
stated that “the Accountancy bodies should get
together and form some scheme for the co-
ordination of the profession” (ICAEW,
MS28428 p. 3). Thereafter, although Palmour
hoped that the ultimate outcome of discussions
on the future of the profession would be its
institutional unification as a single body
OCAS, 121/1/l, dot. 5), “co-ordination” soon
became a cloak for registration. In October a
sub-committee of the Coordinating Committee
met to explore the closer union of the profes-
sional bodies. Almost immediately the attention
of committee members was focused on the
potential for closing off the practice of public
accountancy: “a general discussion took place
as to what form cooperation should take. It
was generally agreed that the recognised
accounting bodies should retain their titles
with one representative Council who would
be responsible for issuing certificates of prac-
tice and a supervisory examination body”
(ICAEW, MS28428 p. 5).
By November 1942 a memorandum propos-
ing the establishment of a Public Accountants’
Council had been composed by the Secretary
of the ICAEW. The proposed Council would
eventually supplant the Coordinating Commit-
tee in representing the profession before
government departments. The principal func-
tions of the Council were, however, less altruis-
tic: it would maintain a register of public
accountants, grant licenses to practitioners
and exercise disciplinary powers (ibid., ff. 9-
14).
The proposals emanating from the Co-ordi-
nating Committee soon encountered difficul-
ties. From the outset the Scottish chartered
societies questioned the need to examine the
organization of the profession during the war.
Palmour considered that the Scats were “being
difficult” and requested Jowitt to intervene
(War Cabinet, CAB 117/46, f. 17). Jowitt duly
wrote to the Secretary of State for Scotland in
October 1942 urging him to encourage the
involvement of the Scottish CAs (ibid., f. 19).
Following exhortations from Palmour that not
only Jowitt but the Board of Trade, the Inland
Revenue, the Ministry of Labour and the Chan-
cellor had urged the accountancy profession to
form a central representative body, the Scottish
chartered societies reluctantly determined in
November to participate in the negotiations
on the future of the profession (ICAS, 121/l/
1, dot. 28).
By March 1943, when agreement had been
reached to proceed with proposals for a sepa-
rate Public Accountants’ Council for Scotland,
the Coordinating Committee considered that
its plans were sufficiently advanced for the pre-
sentation of a draft bill to government. Jowitt
accordingly introduced the proposals to the
relevant minister - Hugh Dalton, the Presi-
dent of the Board of Trade.* The Board of
L It was imperative that the co-ordination proposals had a sponsoring ministry. Due to the pressure of parliamentary
business during the war private members bills were disallowed. Thus it was necessary for a government department to
support and process legislation through Parliament.
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 481
Trade was soon to discover that the proposals
raised “questions of considerable difficulty”
(War Cabinet, CAB 117/46, f. 40). Following
informal soundings from the Federation of Brit-
ish Industries (FBI) (which had opposed regis-
tration in 1929-30) and the National Chamber
of Trade, it was reported to Jowitt in June 1943
that no government action was desirable at
present (ibid., f. 44).
Although meetings took place (at Jowitt’s
suggestion) between representatives of the
profession and the FBI in August 1943 to
resolve differences particularly on the question
of delining a “public accountant” the FBI did
not withdraw its opposition to the registration
proposals. According to Palmour: “the Federa-
tion of British Industries are, as usual, merely
being obstructionist to something which has
not emanated from themselves” (ibid., f.
53A). By February 1944 members of the Co-
ordinating Committee began to question pro-
ceeding further with the proposals (ICAEW,
MS28428, ff. 53-54). Although support had
been forthcoming from Jowitt, the Board of
Trade was negative as was the FBI - a major
producer group. Discord existed between the
Scottish chartered accountants and the ACCA
over a proposal to establish a separate Public
Accountants’ Council for Scotland and the issue
of the duration of training in the office of a
practising accountant required for obtaining a
license. However, the ICAEW-SIAA axis deter-
mined to make further progress by addressing
divisions between the participating profes-
sional organizations and seeking compromise
proposals.
The Publ i c Accountants’ Bi l l , 1946
By February 1946 a compromise was
reached on the question of the duration of
training and in the spring the veil of secrecy
which had surrounded the negotiations to
“coordinate” the profession via registration
was dropped. The product of the protracted
deliberations of the Coordinating Committee
- The Public Accountants’ Bill - was
revealed to a wider audience. l&e Accountant
hailed the Bill as “a veritable landmark in the
history of the profession” (1946, p. 276) due to
its potential for alleviating internecine strife
“particularly in regard to approaches made
from time to time between the national
Government and the profession” (ibid., p.
290).
The Public Accountants’ Bill attempted a
form of registration without organizational inte-
gration. The President of the ICAEW asserted
that “the paramount principle underlying the
proposals is that each body retains its separate
identity, its separate designations and its sepa-
rate control . . our principal object is to co
ordinate, by means of the need to obtain a
license, all those members of our profession
who wish to carry on the practice of public
accountancy” (ibid., p. 335). The members of
the Institute of Municipal Treasurers and
Accountants and the Institute of Cost and
Works Accountants were excluded from the
provisions of the Bill on the grounds of their
not being involved in the practice of “public
accountancy”.
The Public Accountants’ Bill was approved
by large majorities of the members of the insti-
tutes represented on the Co-ordinating Com-
mittee at extraordinary meetings on 4 June
1946. The Bill was then referred to the Co-ordi-
nating Committee for final amendment. As the
detail of the Bill was further scrutinized, an
increasing number of problems arose, particu-
larly in relation to the definitions of “public
accountant” and “public accountancy”. The
terms were defined in the Bill as follows:
“Public Accountant” means a person, who carries on a
Public Accountancy practice and who, in connection
with that practice, offers his services for reward to
members of the public, except that it does not include
a person, who carries on such a practice as part of and
as subsidiary to his principal business or practice;
“Public Accountancy” means the preparation, investiga-
tion, audit and certification of balance sheets, profit and
loss accounts and statements of income and expendi-
ture or other similar accounts, or any one or more of
those functions (The Accountant, June 1946, p. 305).
The position under the Bill of occupational
groups such as income tax experts, whose
482 S. P. WALKER and K. SHACKLETON
principal business was the preparation or inves-
tigation of accounts, was ambiguous. Others,
such as accountants employed in local and cen-
tral government were affronted by their exclu-
sion given that they performed accounting
functions in “public” institutions. By August
1946 a consolidated list of 47 suggested
amendments was prepared for consideration
and in November the Parliamentary Agents
for the Bill suggested that the Coordinating
Committee consider substantial alterations on
“major points of difference” which had also
been raised by Commissioners of the Inland
Revenue and the Board of Trade (ICAS, 121/l/
2, dot. 7).
The impetus behind the Public Accountants’
Bill was being frustrated and its difficulties
were to be compounded by its embroilment
in legislation of greater moment. The appear-
ance of the Companies Bill, 1946 would ensure
that the implementation of the provisions con-
tained in the Public Accountants’ Bill became
much less pressing.
The Companies Act, 1947
In June 1945 the Cohen Report on Company
Law Amendment was published and recom-
mended that the practice of corporate auditing
by unqualified persons be outlawed. The
Report suggested that audit appointments be
limited to the members of professional insti-
tutes currently eligible for the office of “pub-
lic auditor” under industry specific legislation
(p. 65). The resulting Companies Bill, 1946
contained a provision that auditors were to
be selected from among the members of a
U.K. body of accountants recognized by the
Board of Trade.
The Coordinating Committee was informed
in December 1946 that the Board of Trade had
framed the clause relating to the qualification
of auditors “with the Public Accountants’ Bill
in mind” and that its provisions would be oper-
ated “in the closest possible consultation with
the Coordinating Committee”
(ICAm,
MS28435/42, Box 2). Senior accountant repre-
sentatives recognized that the audit provisions
might negate the need for the Public Accoun-
tants’ Bill and urged the Board of Trade to
incorporate a clause in the Companies Bill to
the effect that future legislation for the accoun-
tancy profession would not be prejudiced. The
Board of Trade assured the Coordinating Com-
mittee that the auditor qualification clause was
temporary but necessary as a Public Accoun-
tants’ Bill could not be passed before 1950
given the pressure on parliamentary time
(ICAS, 121/l/2, dot. 6).
In July 1947, the Coordinating Committee
attempted to rejuvenate the Public Accoun-
tants’ Bill by announcing that difficulties had
been overcome and that the draft legislation
had been formally submitted to the Board of
Trade with a request for early consideration
by Parliament (The Accountant, 1947, p. 14).
Once again, however, the Board of Trade effec-
tively placated the Bill’s promoters by the
establishment during the autumn of 1947 of
an Accountancy Advisory Committee. This
committee was to advise on the working of
the accounting provisions of the consolidating
Companies Act which were to come into force
on 1 July 1948.
The Accountancy Advisory Committee
In December 1946 it had been suggested by
the Board of Trade that “the Coordinating
Committee would be available as a ready
made consultative committee” on the opera-
tion of the audit qualification clause of the
Companies Act (ICAEW, MS28435/42, Box 2).
In April 1947, E. H. S. Marker, the Principal
Assistant Secretary (Insurance and Companies
Department) at the Board of Trade, noted that:
The problems in regard to accounts are of a highly
technical nature and will need a good deal of working
out before the provisions are put into force I
suggest a special committee on this matter also of a
consultative nature something along the lines of
the Co-ordinating Committee (Board of Trade, BT58/
446/7450, 24.9.47).
In October, Marker, together with other
senior officials in the Insurance and Compa-
nies Department, discussed membership of
the proposed advisory committee with Sir
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 483
Russell Kettle who was a member of the
ICAEW Council and of its Parliamentary and
Law Committee. Sir Russell had assisted the
Board in drafting companies legislation. It was
concluded that only the English and Scottish
chartered bodies and the Incorporated accoun-
tants should be represented on the committee.
The episode revealed the persistence of a con-
descending disposition towards the ACCA
among senior bureaucrats and chartered
accountants despite the participation of certi-
fied accountants on the Coordinating Commit-
tee. Marker suggested that representatives of
the ACCA could be excluded from member-
ship of the advisory committee on the grounds
of their being “numerous, but unimportant
and, in Kettle’s view, useless” (ibid.,
30.10.47). He added that “We could always
call them in if necessary. It would be embarras-
ing, on application from important companies
under the new Act, to have to consult someone
not of the highest calibre” (ibid.).3
The Accountancy Advisory Committee com-
prised many of the leading members of the co-
ordination movement and from its first meet-
ings in February 1948 its principal concern
was the definition of those qualifying bodies
whose members were to be eligible to conduct
corporate audits (Board of Trade, BT58/574/
COS3409/1948). The Advisory Committee was
to assume more than a consultative function.
Its existence ensured that the mainstream
accountancy bodies were effectively given
power by the Board of Trade to adjudicate
over the claims of those second tier organiza-
tions of accountants which sought the status of
a qualifying body under the audit provisions of
the Companies Act. Marker prepared a memor-
andum on the functions of the Committee and
determined that “we can make our license sub
ject to whatever conditions we think proper
and a license can be revoked if the conditions
are not complied with” (ibid.). As a governing
institution, the Accountancy Advisory Commit-
tee was effectively empowered to select a de
facto register of corporate auditors.
During May 1948 the Accountancy Advisory
Committee considered applications for recog-
nition under the auditor qualification clause
of the Companies Act from a number of orga-
nizations of accountants and individuals with
non-U.K. qualifications.* All institutional appli-
cations were rejected or deferred on the
grounds that the members were not qualified
by examination or that the examinations
passed were of a low standard. Although the
Committee arrived at its conclusions primarily
on the basis of such meritocratic criteria, the
prospect of “fee snatching” if recognition was
granted to junior bodies also featured in their
deliberations (ibid.).
The proposed absorpti on of the j uni or
soci eti es
Although the Accountancy Advisory Cornmit-
tee rejected the applications of the junior socie-
ties for recognition as qualifying bodies, it
became apparent during 1948 that some of
the i ndi vi dual members “have the qualifica-
tions to warrant recognition under Section
23(l)(a)” (Board of Trade, BT58/574/
COS3409/48). Given the prospect of receiving
numerous applications from individuals and
the fear of being swamped by appeals, the
’ The Association was naturally annoyed at its exclusion from the Accountancy Advisory Committee and sought an
explanation from the Board of Trade. The Secretary of the Association reported in December 1948 that E. H. S. Marker
of the Board of Trade had stated that “membership of the Committee was nothing to do with accountants” and that “it was
purely coincidental that a member of the Institute and a member of the Society were on that committee because they
were there as representatives of non-accounting organisations and not as representatives of the Institute” (ACCA, Minutes,
14.12.48). This disingenuous response elicited no further comment by the ACCA.
* The institutions involved were: The Btitish Association of Accountants and Auditors Ltd., The Association of International
Accountants Ltd, The Faculty of Auditors Ltd, The Society of Commercial Accountants Ltd, and The Association of
Practising and Commercial Accountants Ltd.
484 S. P. WALKER and K. SHACKLETON
Board of Trade considered the prospect of
recognizing a “fourth” body of qualified
accountants in addition to the chartered insti-
tutes, the SIM and the ACCA. The senior offt-
cial in the Insurance and Companies
Department of the Board of Trade suggested
that an additional organization could arise
from an amalgamation of the “better ele-
ments” of the British Association of Accoun-
tants and Auditors, Ltd, the Faculty of
Auditors Ltd and the Association of Intema-
tional Accountants Ltd. However, it was
deemed preferable for the suitably qualified
among these junior societies to be absorbed
by the ACCA (ICARW, Coordination Minute
Book, 1946-1951, p. 25). The Association
referred the absorption proposal to the Co-ordi-
nating Committee (ACCA, Minutes, 14.12.48).
In December 1948 the Committee, unani-
mously resolved to view the proposed absorp-
tion “with disfavour” (ICAEW, Coordination
Minute Book, 1946-1951, p. 26).
As it became clear that the Board of Trade
and the Treasury strongly supported absorp
tion rather than the creation and recognition
of an additional organization of accountants
the initial policy of the Coordinating Commit-
tee was reversed. An ICARW Advisory Commit-
tee on Coordination resolved in February 1949
that “owing mainly to political considerations”
the Council should recommend the absorption
provided that the Board of Trade deny recogni-
tion to any other professional bodies and satis-
factory eligibility criteria be established for the
admission of the “better elements” to the
ACCA (ibid., p. 22). Thereafter, the Co-ordinat-
ing Committee met primarily to discuss absorp-
tion proposals: the numbers involved (about
1500) and the conditions of entry (ICAEW,
Coordination Minute Books, 1946-1951,
1951-1955).
The absorption proposals had important
implications for the Public Accountants’ Bill.
Recognition of a fourth body of accountants
by the Board of Trade would have meant that
the new organization would have to be
included in the Bill. It was also to be suggested
that consideration of the Public Accountants’
Bill was adversely affected and delayed by the
profession’s inconclusive response to the issue
of absorption (ICARW, MS28435/42, Box 4).
The demi se of the “co-ordi nati on”
movement
During 1948 and 1949 the participating
organizations reexamined their policies on leg-
islation for the profession. The passing of the
Companies Act had materially altered the posi-
tion regarding the Public Accountants’ Bill in
two ways. Firstly, the, auditor qualification pro-
visions and the determination of recognized
bodies by the profession itself (via the Accoun-
tancy Advisory Committee) secured a substan-
tial degree of protection which had
underpinned the proposals for registration.
Secondly, the accountants were unsure as to
the extent of the Board of Trade’s support for
the Bill now that the department’s most impor-
tant measure was on the statute book. Other
complications were the pressure on parliamen-
tary time and the Socialist complexion of the
administration. In June 1948 there were sugges-
tions that the advancement of a Public Accoun-
tants’ Bill should “wait for a change of
Government” (ICAEW, Coordination Minue
Book, 1946-1951, p. 16) as advancing legisla-
tion at this time held the “possible danger of an
attempt on the part of the Left Wing elements
of the Government to obtain control of the
whole profession” (ibid., p. 15).
More importantly, following consultations
with other government departments and out-
side bodies, the Board of Trade suggested
changes to the Public Accountants’ Bill in July
1948 which were so fundamental as to effec-
tively initiate a process of retreat by the profes-
sional organizations led by the ICAEW (KAEW,
MS28435/42, Box 3). The term “public accoun-
tant” was objected to, and wider representa-
tion on the Public Accountants’ Councils was
advocated. Further, it was considered that
accountants in the public sector should not
be precluded from practice and the complete
ban on non-licensed accountants from practis
ing was questioned (ibid.). The President of
ICAEW determined that the latter “vitiates the
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 485
whole principle of the BiII” (ibid.) and in
November his Council recognized that the
Companies Act had materially altered the ques
tion and that a BiII would require major revi-
sions to satisfy government (ICAEW, MS2841 l/
14, p. 292). It was resolved to alter the function
of the Coordinating Committee such that it
became an organ for maintaining contact
between the participant Institutions and an
interface between the profession and the
Board of Trade (ICAEW, Coordination Minute
Book, 19461951, pp. 24-25).
In November 1949 the President of the
ICAEW disclosed that his secretariat had never
been at ease with the proposed legislation for
the profession and that the question required
conclusive deliberation (ibid., p. 37). The
views of the district societies of the ICAEW
were elicited and in March 1950 it was
resolved to abandon the 1946 draft of the Pub
Iic Accountants’ BiIl and explore alternative
legislation (ibid., pp. 48-49). By June 1950,
an Accountants’ (Public Practice) Bill had
been prepared though its limited object (to
prevent misdescription by unqualified per-
sons) failed to satisfy the ICAEW. On 12 April
1951 the Council of the ICAEW concluded, by
an overwhelming majority, that the Bill “fails to
serve the purpose for which it was devised
and, in view of the apparently insuperable dif-
ficulties, is of opinion that there is no useful
purpose in continuing negotiations for the co-
ordinating of the profession on these lines”
(Minutes, 1949-1952, p. 272). Six days later,
the Coordinating Committee effectively halted
the crusade to secure registration (ICAEW, Co-
ordination Minute Book, 1946-1951, pp. 99-
106). The ACCA was alone in opposing the
abandonment of the Bill. One of its representa-
tives on the Coordinating Committee angrily
concluded:
Thus after years of careful consideration, of patient and
prudent e xamination we are back to the place from
which we started. It would appear that alI our work
has been badly done - that it has been defective and
thus futile.
In the next few weeks we shall be having our Annual
General Meetings. What are we going to tell our mem-
bers? That of all the great professions ours is the only
one that cannot evohre a scheme of regulation or CCP
ordination - that where architects, dentists, and others
have tried and succeeded, accountants have tried and
failed. That we are unable to meet our own needs or
those of the public (ibid., p. 101).
Following the abandonment of the Accoun-
tants’ (Public Practice) BilI in 1951 the Co-ordi-
nating Committee concentrated its efforts on
the administration and amendment of the audi-
tor qualification provisions of the Companies
Act, 1948 (contained in Section 161) (ibid., p.
106). It was resolved that any application to the
Board of Trade by the Institute of Municipal
Treasurers and Accountants for recognition
should not be opposed and it was proposed
that the auditors of exempt private companies
(mainly family concerns) under the Act should
also be members of one of the recognized bod-
ies (Section 161 did not apply to exempt pri-
vate companies). In January 1952, the Board of
Trade considered that with the advent of the
Conservative Government and given the
“moral obligation” which the Board of Trade
had to the profession following the previous
lengthy discussions, a Bill to amend Section
161 might be favourably received (KAEW,
Coordination Minute Book, 1951-1955, pp.
17-18). However, the latter was to proceed
once the ACCA absorption of c. 900 “better
elements” of the junior societies had been
completed. In May 1955, the Coordinating
Committee held its fmal meeting to hear that
in January the membership of the ACCA had
narrowly rejected the absorption proposals
(ibid., pp. 38-39; also ne Accountant’s Jour-
nal, 1955, p. 53). Although the Faculty of Audi-
tors Ltd and the Anglo Society of Accountants
and Auditors had amalgamated, the Board of
Trade was not to recognize a fourth body.
Thus the genesis of proposals during war-
time and in the period of post-war reconstruc-
tion to secure the registration of the profession
proved unsuccessful. In order to more fully
comprehend the failure of the Coordinating
Committee to secure its essential objective and
the nature of the inst.itutionaI structures which
emanated from its activities, it is necessary to
486 S. P. WALKER and K. SHACKLETON
examine the behaviour and interrelationships of
the principal participants.
THE FAILURE OF THE “CO-ORDINATION”
MOVEMENT
The formation of a peak organization by the
accountancy profession to make unified repre-
sentations to government and to interface with
the centripetal state met with a certain degree
of success. The Coordinating Committee indir-
ectly secured quasi-registration in the realm of
corporate auditing through its interlocking
membership of the Accountancy Advisory
Committee of the Board of Trade. However,
the Coordinating Committee was unable to
achieve registration via licensing bodies akin
to private interest governments. Corporatist
paradigms provide a pertinent framework in
which to analyse the reasons for the failure of
the Coordinating Committee to attain its ulti-
mate objective: a monopoly de J ure of public
accountancy practice.
I nternal and external structures and
rel ati onshi ps
In addition to examining the relationship
between organized interests and the state, cor-
poratist models also encompass the impact of
corporate arrangements on the internal struc-
tures of producer groups and the relationships
between them (Williamson, 1989, ‘p. 75). The
effective representation of collective interests
and participation in policy making and imple-
mentation usually necessitates the creation of a
centralized institution which interacts directly
with government. An additional structure is
thereby added to the functional hierarchy of
institutions which subsequently consists of:
the peak organization (such as the Co-ordinat-
ing Committee); its constituent organizations
(the professional institutes); and the individual
members.
Effective interaction with the state is asso-
ciated with top-led organizational structures,
downward authority flows and a tendency to
leadership determination of constituent inter-
ests. The potential consequences of such insti-
tutional arrangements include the detachment
of the central organization from its constituents
and their memberships and the creation of new
points of institutional conflict (Middlemas,
1980, p. 21). The isolation of the latter groups
is also encouraged by the secretive nature of
negotiations with the state and within the
peak organization which potentially result in
exposure to revolt from below when consent
for decisions is sought (ibid., p. 372). The diffi-
culties faced by the multi-organized accoun-
tancy
profession given the structural
consequences of participation in corporatist
arrangements have been revealed by Cooper
et al . on the issue of inflation accounting
(1989, pp. 256-257, 265-266). Richardson
has also shown that a lack of homogeneity in
professional institutions can introduce an ele-
ment of instability in corporatist relations
(1989, p. 419).
The memberships of the accountancy orga-
nizations generally (with the exception of
ACCA members’ rejection of the absorption
of the better elements of the junior societies
in January 1955) proved accommodating
when called upon to ratify the attempts of
their leaders to reform the profession during
the 1940s and 50s (most notably in June
1946). However, the creation of an additional
representative structure at the apex of the
British accountancy institutions (the Co-ordi-
nating Committee) with which to interface
with government and determine a unified pro-
fessional policy did not rest easily on a founda-
tion of meso-level constituents who were
accustomed to self-interested policy determina-
tion and to periodic displays of inter-organiza-
tional hostility. An additional complication was
that the unique constitutional arrangements of
each organization were not easily accommo-
dated within the top-down pyramidal deci-
sion-making structure required for unified
policy making and for speaking to government
with a single voice.
From the outset, the leadership of the co-
ordination movement and the determination
of policy was dominated by the institutions
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 487
which were popularly perceived as constitut-
ing the guardians of the British profession -
the ICAEW and the SL4A (Z%e Times, 28 May
1941, p. 5). The formulation of policy initia-
tives by the ICAEW-Sk4 axis, their downward
filtration and attempted imposition (via the Co-
ordinating Committee) on the other accoun-
tancy organizations met with considerable
resistance during 1942 to 1946, particularly
from the Scottish CAs and the certified
accountants.
It was stated in 1946 that the Presidents of the
ICAEW and the SIAA had “jointly initiated dis-
cussions” during the Spring of 1942 which had
resulted in the formation of the Coordinating
Committee (n3e Accountant, 1946, p. 178).
The most fervent advocate and leading light
of institutional reform was the President of
the ICAEYV, Charles Palmour, who had
objected to the opposition of the ICAEW to
registration before the Goschen Committee in
1930 (ICAS, 13/3, p. 453). It was to be
suggested that Palmour, who chaired the Co-
ordinating Committee and its subcommittees
until 1945, and maintained close control of
their operations, “was pursuing this subject
hard as a monument to himself” and was
“resolved to carry through what is in his
mind” (ICAS, 121/1/l, dot. 33). He wrote to
Jowitt in October 1942 thus: “As you are prob-
ably aware I am now serving my fifth year as
President of the Institute of Chartered Accoun-
tants and I have very much set my heart on a
real endeavour being made to strengthen our
professional standing” (War Cabinet, CAB 117/
46, fol. 17).
Pahnour’s imposition of strict timetables, the
circumscription of opposition to his proposals,
the covert nature of discussion and the propo-
sals themselves encountered little opposition
from the Councils of the ICAEW (until 1949)
and the SIAA. The translation of such appara-
tus to the Coordinating Committee and the
ICAEW leadership’s determination of constitu-
ent interests was to cause friction with other
accountancy organizations where more com-
plex policy making structures were in place
or were specially instituted to consider the
proposals for the registration of the profession
(see Fig. 1).
The Scottish chartered societies possessed
an additional layer of decision-making machin-
ery which proved an impediment to the effi-
cient operation of downward authority flows
from the Coordinating Committee. In the
ICAEW and SIAA internal decision making on
the proposed legislation for the profession was
reposed in the respective councils. By contrast
the Scottish societies maintained a Joint
Committee and convened the Emergency Sub
Committee of the Joint Committee to discuss
“coordination”. However, executive powers
were vested in the Councils of the local insti-
tutes in Edinburgh, Glasgow and Aberdeen.
This constitutional arrangement proved cum-
bersome, resulted in delayed responses from
Scotland to ICAEW-SIAA proposals and was
aggravated by the difficulties of rail travel
within Scotland and between Scotland and
London during the war. Hence, the President
of the Institute of Accountants and Actuaries in
Glasgow was to complain that “this whole mat-
ter is being rushed. What is the cause of this
urgency? ” (ICAS, 121/1/l, dot. 27). Palmour
claimed that he could never obtain clear policy
directions from the Scottish societies (ibid.,
dot. 33). The Chairman of the Coordinating
Committee appears to have paid little attention
to the logistical and political difficulties of fully
integrating Scottish representatives in the
policy making process.
Whereas the Scats aversion to the top-led
determination of professional policy was
rooted in a long history of adverse reactions
to proposals from south of the border
(Walker, 1995) and was aggravated by their
complex constitutional arrangements, the
apprehension of the ACCA (the “junior
society”) was rooted in a history of hostility
between its predecessor bodies and the senior
societies (Walker, 1991; Shackleton, 1995).
Although enthusiastic about plans for the
reform of the institutions of the profession,
the response of the ACCA to the launch of
the coordination movement in July 1942
was to establish a powerful additional layer
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CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 439
of decision-making machinery - the Policy
Committee - which formed a barrier
between the downward authority flow from
the Coordinating Committee to the ACCA
Council (ACCA, Minutes, 27.7.42).
The Policy Committee of the ACCA was
remitted “to consider questions relating to pol-
icy and planning in the future, including the
question of the coordination and organization
of the profession” (ibid.). Following its forma-
tion, the Policy Committee closely scrutinized
proposals emanating from the Coordinating
Committee, provided policy advice to the
ACCA representatives and its critical reports
were submitted to the Coordinating Commit-
tee itself (much to the distate of Palmour)
(ICAS, 121/1/l, dot. 16). As the negotiations
on registration proceeded the ACCA consid-
ered that its views were not being given full
recognition, that decisions were made which
consistently placed it at a disadvantage to the
“permanent dominant majority” (ICAS, 121/l/
1, dot. 44) of chartered-incorporated interests
and that it was often excluded from informal
negotiations (ACCA, Minutes, 17.12.46). By
May 1944 Palmour was dismayed at the “inde-
finite attitude adopted by the Association and
the unfortunate growing feeling of the impos-
sibility of working harmoniously with them”
(ICAEW, MS28435/42, Box 1).
Coherence of the producer group
Middlemas has stated that “the governing
institutions are not equal in their relative
power or capacity to influence the tinal orien-
tation of the state” (1986, p. 10) and among the
factors which affect their admission to the
realms of central government is the coherence
of their memberships. Interest representation
is more effective when advanced on the basis
of unity and solidarity among the constituents
of the producer group (Beer, 1965, p. 332).
Group power is mobilized when divisive ideol-
ogies previously adhered to by members within
the interest category are devalued and organi-
zational conflicts are replaced by collective
cooperation in order to achieve commonly
desired goals. The essential impediment to
the attainment of the objectives of the Co-ordi-
nating Committee was that the “coordination”
of the profession did not emerge from a con-
sensual recognition among all the accountancy
bodies for registration. The top-led determina-
tion of constituent interests served largely to irri-
tate traditional sensibilities of the accountancy
organizations and tended to the reinforcement
of their particularist ideologies.
The leading advocates of the “coordination”
of the profession recognized the importance of
unanimity from the outset. In October 1942
Palmour stated that “without wholehearted
cooperation among the leading members of
the Profession any scheme will stand small
chance of success” (War Cabinet, CAB 117/
46, fol. 17) and later guarded against the con-
stituent organizations being “too dogmatic”
(ICAEW, MS28435/42, Box 1). The ministers
and senior civil servants who considered the
Public Accountants’ Biil stressed that any mea-
sure would have to be unopposed and non-
contentious (ibid., Box 2). Despite such calls
for the subjugation of partisan tendencies
among the accountancy organizations in order
to achieve the registration of the profession,
traditional hostilities proved too entrenched
even in wartime.
From first receiving intimation in 1942 that
moves were afoot to consider the organization
of the profession, the traditional sensibilities of
Scottish chartered accountants concerning
their position in relation to the English profes-
sion and the history of altercation with the
antecedents of the SIAA and ACCA were
aroused. Proposals for a single Public Accoun-
tants’ Council for the U.K. were perceived as a
danger to the independence of the Scottish
societies - “the thin end of the wedge of giv-
ing away our birthright” (ICAS, 121/1/l, dot.
32) and offered the prospect of “Scotland
becoming subservient to the ICAEW” (ibid.,
dot. 26). Senior office bearers of the Scottish
societies also disapproved of the level of repre-
sentation offered to the ACCA on the proposed
Public Accountants’ Council which was dispro
portionate for a body “which has so little real
qualification as accountants” (ibid.). Other
490 S. P. WALKER and K. SHACKLETON
office bearers in Scotland were outraged by the
proposed unitary credential of “public accoun-
tant” which would imply an equality of status
among certified, Incorporated and chartered
accountants (ICAS, 121/1/l/, dot. 18). The
determination of the Scottish chartered socie-
ties to protect their interests was given official
support by the intervention of the Secretary of
State for Scotland who urged them to “hold out
for separate Scottish machinery of recognition”
under the proposed scheme (Scottish Home
and Health Department, HH1/594 13.11.42)
and “to keep the Scottish point of view well
to the fore” (ibid., 17.5.44).
From the first meeting of its Policy Commit-
tee in October 1942, the ACCA also adopted a
defensive stance to the formation of the Co-
ordinating Committee in anticipation of the
resurrection of old animosities. It was deter-
mined that the ACCA representatives on the
Coordinating Committee “should be given
full authority to take, as occasion arise, any
necessary or expedient action with regard to
anything savouring of non-cooperation or pre-
ferment of sectional interests” (ACCA, Minutes,
27.10.42). When the proposed composition of
the Public Accountants’ Council was revealed
together with the intention to institute a sepa-
rate Public Accountant’s Council for Scotland
ACCA fears were aroused. In May 1943 the
Policy Committee reported that the scheme
reflected “the existence of conflicting inter-
ests, traditional tendencies and partisan sus-
ceptibilities” (ICAS, 121/1/l, dot. 16). The
Scats in particular were considered to place
the protection of their independence above
measures to advance the regulation of the
profession (ACCA, Minutes, 6.11.44). The certi-
fied accountants were constantly suspicious of
the formation of sectional groupings which
threatened its negotiating position.
Further, the ACCA considered that the
proposals emanating from the Coordinating
Committee were at variance with the wartime
spirit of cooperation which had induced the
movement to reform the organization of the
profession:
They provide for a voluntary and hand picked body
constituted in such a manner as will give a permanent
dominant &jority wide and dictatorial powers over a
minority with whom their intersts clash at several mate-
rial points and to whom for many years they have
shown antipathetic tendencies (ICAS, 121/1/l, dot. 16).
Although by 1946, a certain accord had bro-
ken out among the constituent organizations
represented on the Coordinating Committee,
the fundamental and protracted disagreements
between the Scottish chartered accountants
and the certified accountants together with
their common suspicion of the motives behind
the proposals for registration were important
reasons why much of the impetus behind the
early co-ordination movement was lost. By the
time that fundamental disagreements within
the Coordinating Committee had been
resolved, the political climate was radically
altered and regulation of the profession had
become embroiled in companies legislation.
The rhetoric of national interest
The recognition and incorporation of inter-
est associations into the machinery of the cor-
poratist state is dependent upon group
adherence to a consensual view of the national
interest. Middlemas has stated that “those who
aspire to and are able to compete at the
‘altruistic’ level of the national interest enter
the environs of the state” (1986, p. 10). Those
who appear not to be motivated by altruism are
treated as mere interest groups as opposed to
potential governing institutions. Particularly
during the Second World War it was impera-
tive that “at a time of national struggle and
individual self-sacriIice, self-interest had to veil
itself decently in a cloak of legitimacy by claim-
ing to be one aspect of the national Interest”
(ibid., p. 47). Participation in government
implies avoiding the pursuit of explicitly parti-
cularistic demands and adherence to long-term
altruistic objectives (Williamson, 1989, p. 216).
At an early stage the leading figures on tbe
Co-ordinating Committee recognized that legis-
lation for the profession had to be advocated as
being in the public interest (ICAEW, MS28428,
p. 8). Similarly, in their communications with
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 491
ministers and senior civil servants, Palmour and
his colleagues cursorily mentioned that their
proposals were altruistically motivated. In
May 1943, for example, Palmour urged the
Board of Trade to deal with the question of
the accountancy profession speedily “in order
that the public may be protected against such
Intrusion into the work of the profession as
took place after the last war, when large sums
of money were paid to so-called Excess Profits
Duty Recovery Experts calling themselves
accountants” (War Cabinet, CAB 117/46, f.
39a). Similarly, when the Public Accountants’
Bill was presented to the Board of Trade for
consideration in 1947 it was propounded as
“a measure which wiIl be acceptable to H.M.
Government as being in the best interests of
both the public and the profession” (KAEW,
MS28435/42, Box 2).
The transparency of the altruistic veneer was
easily penetrated by Ministers. Dalton, the
President of the Board of Trade, instantly recog-
nized the particularistic nature of the accoun-
tants’ proposals as “a move towards a ‘closed
shop’ in this profession” (War Cabinet, CAB
117/46, f. 44) and was against government con-
sideration of so contentious a measure in 1943.
The covert negotiations which were con-
ducted within the profession made no secret
of the self-interested objectives of the Co-ordi-
nating Committee’s proposals. In August 1942
the stated object of the Committee was “to
consider coordination of the profession in
approaching Government Departments and
the further question of possible restriction of
persons holding themselves out as practising
accountants and other subjects affecting the
welfare of the profession” (ICAEW, MS28428
p. 1). The former object was expeditiously rele-
gated. By October 1942 the function of the sub
committee of the Coordinating Committee was
stated as being to consider proposals “with a
view to making the practice of public accoun-
tancy a closed profession” (ibid., p. 3). By Feb-
ruary 1943 Scottish representatives recognized
that “it now appears that the principal object
of the scheme is the registration of accoun-
tants” (ICAS, 121/1/l, dot. 25). It was only
when the veil of secrecy was lifted on the Pub-
lic Accountants’ Bill in 1946 that the Co-ordi-
nating Committee gave some thought to the
desirability of “emphasising the necessity for
the Bill in the public interest” (ICAEW,
MS28428, p. 92).
The protectionist objects of the Public
Accountants’ Bill - to close the profession to
an expected flood of usurpers on demobiliza-
tion - were strongly advocated whenever the
proposed scheme encountered difficulty from
a recalcitrant organizational constituent. For
example, in December 1943 Palmour informed
the President of the Society of Accountants in
Edinburgh that:
I am strongly of the opinion that we should endeavour
to get the biII through before the war is over. I feel sure
that we shall have a repetition of what happened after
the last war in the way of taxation experts and more-
over there wilI be numerous men coming out of
Government service who have been employed as Cost
Accountants in the Board of Trade, Ministry of Supply
and the Ministry of Aircraft Production, some of whom
wilI endeavour to start practice on their own (KAEW,
MS28435/42, Box 1).
The particularist motives were not modified
after the Second World War. In November
1949 the President of the ICAEW composed a
list of the advantages of the legislation which
was proposed for the profession. At its head
was “The closing of the door to the formation
of other public accountancy bodies” (ibid.,
Box 4).
The sceptics on the Coordinating Commit-
tee were among the first to recognize the
potential futility of advocating registration for
the profession as in the interests of the wider
community during periods of wartime patrio-
tism, national emergency and post-war consen-
sus politics. In January 1944 the President of
the Edinburgh Society informed Palmour that
“the fact is that the Scheme is an attempt by
the Profession to close it, and it will be judged
in that light by Parliament and the general pub
lit” (ibid., Box 1). By April 1951 the ICAEW
finally comprehended that there was no “real
demand from the public” for protection from
492 S. P. WALKER and K. SHACKLETON
unqualified accountants (ICAEW, Coordination ment would not adopt the Public Accountants’
Minute Book, 1946-1951, p. 98). Bill as a public measure.
All i ncl usi ve parti ci pati on
Claims that corporatist arrangements are in
the national interest are also legitimized by the
inclusion of the principal representative groups
in the lobbying and co-operative process. The
effective advocacy of group interests requires
corporate representation. If producer groups
are to influence government then the interest
must be comprehensively organized (Beer,
1965, p. 331). Enhanced power and influence
accrues to those peak organizations which can
claim to represent a high “density” of the
eligible constituents in their functional domain
(ibid., p. 332). Further, if the state is to utilize
group
institutions for implementational
functions then it is imperative that the associa-
tion “covers most, if not all, those producers
which are the target for the intervention”
(Williamson, 1989, p. 110).
Among those groups who were invited to
participate on the Coordinating Committee,
one set of organizations in particular were
reluctant to take part. From the outset the
Scottish societies adopted a detached ambiva-
lence to the attempt to address the organiza-
tion of the profession. They were never
convinced of the need to seek registration
during a period of national emergency and
deprecated the speed with which the propo-
sals were discussed. The Scottish representa-
tive at the first meetings of the Coordinating
Committee in 1942 attended as an observer and
was expressly instructed not to commit the
societies to policy initiatives (ICAS, 121/1/l,
dot. 32). The participation of the Scottish
societies in the later negotiations was moti-
vated by defensive reasons and for fear of
being sidelined or otherwise forced to partici-
pate by the Government (ibid., dot. 28).
Previous attempts to regulate the profession
had failed due to an inability to achieve unani-
mity behind any one set of proposals
(Macdonald, 1985). The senior office bearers
of the ICAEW and SIAA were therefore anxious
to obtain the cooperation of all the principal
U.K. organizations in the formation of the
representative Coordinating Committee and
in the determination and implementation of
the legislation for the profession. For Jowitt,
the minister responsible for reconstruction,
the concept of all inclusivity was an essential
tenet of post-war planning. It was important
that “as far as possible to neglect no expres-
sion of responsible and Informed opinion
which can help in forming plans for the future
based on experience of realities and expressive
of the united national will’ (War Cabinet, CAB
87/l, Memorandum No. 2, 27.2.41). In June
1944 Jowitt warned the accountants that
“only with full agreement between the various
bodies would there be the slightest chance of
securing the legislation desired” (Scottish
Home and Health Department, HH1/594,
20.6.1944) as without unanimity the Govem-
On two occasions the Chairman of the Co-
ordinating Committee was compelled to visit
Edinburgh to “beard the lion in its den” (War
Cabinet, CAB 117/46, f. 32). In March 1943
Pahuour persuaded the Scats to remain in the
scheme by conceding the formation of a sepa-
rate Public Accountants’ Council for Scotland.
In December 1945 Sir Harold Howitt (who had
succeeded Palmour as the President of ICAEW
and ex officio Chairman of the Coordination
Committee in the summer of 1945) attempted
to resolve fundamental differences between
the Scottish chartered societies and the ACCA
concerning the period of training required for
admission to the proposed register of public
accountants. On his return, Howitt reported
that the Scats would be content if the propo-
sals were completely dropped and gave some
thought to the option of limiting the Bill to
England and Wales, as, “having regard to their
numbers, the Scotchmen are being completely
unreasonable” (ICAEW, MS28435/42, Box 1).
The dispute over the period of training was
resolved in 1946. The Scottish societies played
no significant part in the subsequent delibera-
tions concerning the fundamental problems
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 493
with the Public Accountants’ Bill. When the
decision was announced by the ICAEW to with-
draw legislation for the profession in April
1951, the Councils of the Scottish societies
were happy to accede.
In dete rmining which of the mainstream
accountancy organizations to include in its
deliberations, the question of representation
on the proposed Public Accountants’ Council
and the conferment of the status of qualifying
body under the scheme, the Coordinating Com-
mittee was much occupied with constitutional
difficulties surrounding the participation of the
Irish Institute. The essential problem was that
any legislation emanating from the British
Parliament had no relevance in Eire and
although the ICAI had an office in Belfast, it
was primarily a Dublin-based organization. It
was not until July 1943 that a representative
of the ICAl was admitted to membership of
the Coordinating Committee. However, when
the Public Accountants’ Bill was printed in April
1946 the ICAI was not included as a “qualifying
body”. In April 1947, the representative of the
Irish Institute on the Coordinating Committee
stated “that the ICAI would oppose the Bill in
every possible manner” unless qualifying body
status was conferred on his Institute (ICAEW,
Coordination Minute Book, 1946-1951, p.
12). By July 1948, on the determination that
its establishment in Northern Ireland ensured
that it was within the domain of U.K. legisla-
tion, the ICAI had achieved its objective and
was also to secure recognition from the Accoun-
tancy Advisory Committee for the purposes of
the audit provisions of the Companies Act, 1947
(ibid., p. 18).
In addition to the difficulties relating to the
participation of the principal accountancy
organizations in the framing and implementa-
tion of the proposals to regulate the profes-
sion, the Coordinating Committee was
confronted with the considerable problem of
defining which of the multifarious organiza-
tions of accountants outside of the mainstream
institutions to exclude from its deliberations
and designs. Given that the object of the Com-
mittee was to formulate proposals to secure
closure via the registration of publ i c accoun-
tants, those organizations whose members
were outside public practice or were consid-
ered undeserving of the credential were
excluded from negotiations and the provisions
of the proposed legislation. All inclusivity was
inherently unattainable given the essential
objectives of the Public Accountants’ Bill.
From a relatively early stage ministers
received complaints from those groups who
were excluded from the secret negotiations
being conducted between the Coordinating
Committee and government on the future of
the accountancy profession. In May 1943 the
Association of International Accountants
asserted that all organizations of accountants
were entitled to be consulted and deprecated
the prospect of those institutions outwith the
mainstream profession being presented with a
fai t accompl i without “having had the slightest
knowledge of what has been going on” (War
Cabinet, CAB 117/46, fol. 55).
Similarly, in November 1944 the Coordinating
Committee determined not to consult the Insti-
tute of Cost and Works Accountants (ICWA) and
the Institute of Municipal Treasurers and
Accountants (IMTA) until the proposals were
finalized (ICAEW, MS28428, pp. 57-58). Follow-
ing the entry of the Public Accountants’ Bill to
the public domain in 1946, the ICWA com-
plained that the non-inclusion of its members
as “public accountants” was prejudicial to cost
accountants. The IMTA also expressed discon-
tent over the exclusion of its members who con-
sidered themselves as accountants in public
service and argued that the proposed legislation
be extended to cover “the whole of the accoun-
tancy profession” (ICAEW, Coordination Minute
Book, 1946-1951, p. 78).
The Board of Trade and the Coordinating
Committee received objections to the Public
Accountants’ Bill and its successor from other
organizations of accountants, government
departments and trade unions such as the
National Association of Local Government Offi-
cers (NALGO). The General Secretary of
NALGO asserted that his union’s “member-
ship includes qualified and unqualified persons
494 S. P. WALKER and K. SHACKLETON
employed in accountancy work by local
authorities and statutory undertakers . . . who
might properly claim to be true public account-
ants” (BT58/574/COS3409/1948, 27.1.48). Such
groups complained that they were not privy to
the genesis of the proposals and would be dis-
advantaged by their implementation. The Co-
ordinating Committee was urged by the Board
of Trade to meet representatives of the outside
bodies (ICAEW, MS28428 pp. 96-97) in order to
achieve a Bill acceptable to all parties. The con-
sequences of the late attempts of the Co-ordinat-
ing Committee to respond to the need for all
inclusivity were the increasing dilution of the
original proposals (which ultimately proved
unsatisfactory to the Coordinating Committee)
and the protraction of the discussions.
The primacy of the state
Although corporatists recognize the depen-
dency of the government on producer groups
due to their potential informational and lmple-
mentational functions, it is the state which
determines the timing of the institution of cor-
poratist relations and the nature of the interac-
tion (Middlemas, 1986, p. 10). In short, the
state occupies a position of “relative auton-
omy” (Williamson, 1989, pp. 29-32), it “has
the freedom to pursue particular strategies in
line with its own institutional interests” (ibid.,
p. 129) and has the resources to ensure that
these prevail. Also of significance in the power
relations between the state and the producer
group is the concept of reciprocity whereby
corporatist arrangements are instituted on the
basis of mutual advantage and consent.5 Gov-
ernments are more receptive to the demands of
producer groups when their implementation
has beneficial consequences for the state.
referred to the utility of the accountancy orga-
nizations making representations as a func-
tional whole, successive governments during
the 1940s and 50s did not call for registration.
The impetus behind the latter came from the
ICAEW-SIAA axis. The meeting of representa-
tives of the ICARW with the Minister responsi-
ble for reconstruction in July 1942, which
marked the beginning of state interest ln the
structure of the profession, had been insti-
gated by the London Members Committee of
the ICARW, not by the Government. Treasury
officials were averse to attending a meeting
with accountants and the Reconstruction
Secretariat were “not anxious to put any pro-
posals or task before them and only proposed
to hear what they had to say” (War Cabinet,
CAB 117/46, f. 7). When the minister respon-
sible for reconstruction problems met the
ICARW representatives in September 1942 to
discuss post-war cost accounting he indepen-
dently “raised the question of collaboration
within the profession” (ibid., f. 16) and wel-
comed attempts to establish a high standard
of qualification for accountants. This was taken
by the President of the ICAEW as an opportu-
nity to formulate proposals for registration.
Although the state had instituted corporatist
relations with the accountancy profession dur-
ing the early years of the war in relation to
accounting manpower and the provision of
expert knowledge and some ministers had
The disinterest of the government in initia-
tives for the closure of the accountancy profes-
sion by legislation is revealed by the fact that
proposals for institutional reform did not ema-
nate from the relevant ministry - the Board of
Trade - and by the negative reaction of that
Department to the registraton proposals which
were presented to it during the spring of 1943.
The Board “were far from being convinced of
the desirability of the organisation of the pro-
fession on the basis contemplated” (Scottish
Home and Health Department, HH1/594,
20.6.44).
The success of the Public Accountants’ BiIl
depended on it being adopted as a government
measure sponsored by the Board of Trade
(ICARW, MS28435/42, Box 1). However, the
e
’ In accounting regulation for example, Cooper et al. show how the profession was granted privileges in return for the
application of policies advantageous to the state (1989, p. 252).
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION
495
Board of Trade under both the wartime CoaIi-
tion and post-war Labour Governments had an
alternative agenda of more compelling issues,
in particular the reform of company law (see
Bircher, 1988, pp. 116-119). The creation of
Public Accountants’ Councils and registration
of the accountancy profession was low on the
list of legislative priorities. Once an agreed Pub
lit Accountants’ Bill was presented to the
Board of Trade in June 1947 the accountants
were informed that the matter would not be
treated as urgent and that it might take three
years for the Bill to reach the Statute Book
(ICAEW, Coordination Minute Book, 1946-
1951, p. 10; MS28435/42, Box 2). The Presi-
dent of the ICAEW later commented that
although “the draft Bill was sympathetically
received by the Board of Trade . . . its progress
was inevitably delayed by various considera-
tions and in particular by the extensive legisla-
tive programme of the Government” (ibid., p.
94).
The proposals contained in the Public
Accountants’ Bill did not offer sufficient reci-
procal benefits to the state, particularly in the
context of the more urgent legislative priorities
of the post-war Labour Government. The Board
of Trade was most amenable to the participa-
tion of accountants in policy determination and
implementation when it recognized that they
would prove useful in the execution of its
own programme. Hence, when it was realized
in 1947 that the interpretation and implementa-
tion of the accounting provisions of the Com-
panies Act would require consultation with
those reposed of the requisite technical exper-
tise the Coordinating Committee was enlisted
by the Board of Trade as a ready made specia-
list forum (Board of Trade, BT58/446/7450).
The Board of Trade also utilized its power in
relation to the Public Accountants’ BiII by
imposing its own demands as a condition of
its success. During the late 1940s and early
1950s government support for the regulation
of the profession was essentially made condi-
tional on the successful absorption of the lesser
accounting organizations to avert the creation
of a “fourth body” of practitioners (ICAEW, Co-
ordination Minutes, 1946-1951, p. 22).
The rol e of the bureaucracy
Corporatist writers increasingly recognize
the role of the bureaucracy at the interface of
state/producer group relations and the poten-
tial significance of conflicts between compet-
ing interests within bureaucratic structures
for the advancement of group demands and
the operation of corporatist intermediation
(Williamson, 1989, pp. 180-182). Although
senior departmental civil servants assume
brokerage and organizational roles in inter-
mediary relationships, bureaucrats also consti-
tute groups within the state which are not
averse to the protection of their own interests
and functional domains (ibid.; Middlemas,
1986, p. 6). Middlemas has also drawn atten-
tion to the role of the “mandarin elite of the
civil service” (p. 9) in the development and
transmission of corporatist ideologies such as
conflict avoidance and the primacy of the
national interest over the demands of particu-
lar interest groups (pp. 9-10).
The documentary evidence suggests that the
Coordinating Committee seriously underesti-
mated the power of the senior civil servants
who monitored and scrutinized their propo-
sals. Bureaucratic aversion to contentious mea-
sures during a period of consensual politics and
the extent to which departmental officials
sought modifications to the Public Accoun-
tants’ Bill for reasons of self interest surprised
the accountants. Bureaucratic mediation
resulted in the framing of bills for the pro-
fession which contained measures which
were so diluted as to prove unpalatable to the
Coordinating Committee.
From April 1943 onwards the official who
dealt with the question of the organization of
the accountancy profession was E. H. S. Mar-
ker, Principal Assistant Secretary of the Insur-
ance and Companies Department of the Board
of Trade (see who’s IVbo, 1956, p. 1971). As
registration of the profession had not emanated
from the Board as a matter of public policy,
ministerial Involvement in the scrutiny of the
496 S. P. WALKER and K. SHACKLETON
proposals was minimal. The success of the
proposals depended heavily on Marker’s dispo-
sition and until he recognized that the Co-ordi-
nating Committee would prove useful for his
Department’s purposes in the implementation
of the Companies Act in 1947, he was decid-
edly unenthusiastic. In June 1943, for example,
Palmour complained to Jowitt that “my meet-
ing with Mr Marker of the Board of Trade and
his attitude on the whole question have tilled
my colleagues and myself with nothing but pes-
simism, and his criticism seems to be of an
entirely destructive character” (War Cabinet,
CAB 117/46, f. 46). It was later complained
that Marker was peevish, uncompromising
and procrastinating (ibid., f. 52).
From the presentation of the Public Accoun-
tants’ Bill to the Board of Trade in 1947 and the
establishment of the Accountancy Advisory
Committee, Marker entered into a more parti-
cipative relationship with the Coordinating
Committee. In addition to holding frequent dis
cussions with delegations from the Committee
he was invited to some of its meetings and his
advice on the content and progress of legisla-
tion for the profession was invariably heeded.
The difficulties which beset the Public Accoun-
tants’ Bill after 1946 resulted in radical redraft-
ing and retreat from the original registration
proposals in order that Marker’s own sugges-
tion of a profession based on “the doctors
model” (ICAEW, Coordination Minutes,
1946-1951, p. 40) might form the foundation
of legislation.
As part of the process of consultation, the
Public Accountants’ Bill was also circulated to
interested government departments outside
the Board of Trade. The principal objections
from other ministries were that the Bill inter-
fered with the career intentions of retired civil
servants and inspectors of taxes (who might
wish to practise accountancy) and the exclu-
sion of accountants in government and quasi-
government service from the definition of
“public accountant”. The Comptroller and
Auditor General, for example, complained in
April 1948 that on the completion of their train-
ing the accountants in his department were as
qualified as professional men (ICAEW,
MS28435/42, Box 4). Despite an initial resis
tance, the Coordinating Committee conceded
to the inclusion in its later proposals of accoun-
tants with experience in government depart-
ments and local authorities with the
consequence that the Bill became little more
than an attempt to prevent misdescription.
During the autumn of 1949 the issue of
organizational reform of the accountancy pro-
fession was considered to be at a crossroads -
the position had been altered by among other
factors, “the attitude of the Civil Service
toward the Bill” (ibid.). The Council of the
ICAEW was urged to provide guidance to its
representatives on the Coordinating Commit-
tee on future policy “in view of possible pres-
sure from certain sections of the Civil Service
and other sources for further dilution of the
ban on practice” (ICAEW, Co-ordination
Minute book, 1946-1951, p. 38).
CO-ORDINATION AND STRUCTURAL
CHANGE
Although the Coordinating Committee failed
to secure the registration of the profession its
activities did result in the emergence of sub-
stantial institutional changes. Two sets of amal-
gamations - the formation of ICAS in 1951 and
the chartered-SW% mergers of 1957 - were
founded on traditional allegiances which had
been fortified as a consequence of the co-ordi-
nation movement.
The uni_fication of the Scottish profession,
1943- 1951
Previous attempts to merge the Edinburgh,
Glasgow and Aberdeen societies had proved
fruitless primarily because of resistance from
the members of the Society of Accountants in
Edinburgh (Shackleton, 1995). The wartime co-
ordination episode, however, revealed that the
local organization of the Scottish profession
was outmoded and cumbersome. The deci-
sion-making process comprising three power-
ful councils and a Joint Committee of
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 497
Councils prevented swift and concerted action
and reaction.
In December 1943 the Council of the
Glasgow Institute (IAAG) had adopted a resolu-
tion which advocated the amalgamation of the
three Scottish societies (ICAS, 130/12, p. 48).
No further action was taken until November
1945 when a number of Glasgow members
prepared a resolution to appoint a full-time
secretary of their Institute. The Council of
the IAAG considered that this proposal consti-
tuted a major impediment to the amalgama-
tion of the Scottish societies and persuaded
the requisitionists to withdraw their motion
(ibid., pp. 248-249). However, Sir David
Allen Hay, the President of the IAAG, sug-
gested at the December meeting of the Joint
Committee that the agenda of the next meet-
ing should include a motion that the three
societies should merge. At the Joint Commit-
tee of Councils meeting of January 1946 Sir
David Allen Hay stated that “he had been
impressed as a member of the Coordination
subcommittee by the expeditious manner in
which the Council of the ICAEW came to
decisions as compared with the Scottish pro-
cedure” WAS, 13/4, pp. 556-557). A sub-
committee of the Joint Committee of Councils
was appointed to investigate the possibility of
amalgamation and the concept of merger was
later agreed by the councils of the Edinburgh,
Glasgow and Aberdeen societies (ibid., p.
619).
Subsequent complications relating to the
location of a Scottish institute, the status of
the existing royal charters and the Edinburgh
society’s Endowment and Annuity Fund
delayed the amalgamation (see ICAS, 13/4 and
13/5). However, by November 1950 the propo-
sals for the formation of ICAS had been agreed
by the memberships of the three local insti-
tutes. Sir David Allen Hay considered that the
merger would “enable the Scottish Chartered
Accountants as a unified body, to take a more
effective place in their association with the
other bodies of organised Accountants in Great
Britain than has been possible hitherto” (Z%e
Accountant’s Magazi ne, 1950, p. 352; also
ICAS, 1954, p. 75).
“A momentous scheme” - the chartered-
i ncorporated merger, 195 7
The integration of 10,540 members of the
Society of Incorporated Accountants into the
English, Scottish and Irish chartered institutes
is often perceived as a response to develop
ments in the years immediately preceding
1957. Emphasis has been placed particularly
on the impact of changes in the labour market
for accountancy services in the post-war
economy (Willmott, 1986, pp. 568-569). By
contrast, the primary sources reveal that the
integration of 1957 was a product of the
debate on the future of the profession during
the 1940s and was a political expedient for the
chartered institutes. As the historian of the ICAI
has recognized, it was the Coordinating Com-
mittee which “brought together the leaders of
the Institutes of Chartered Accountants and of
the Society of Incorporated Accountants and
Auditors and led to conversations which
ultimately produced integration” (Robinson,
1964, pp. 279-280).
The scheme of integration was publicly advo-
cated by the institutions involved as an attempt
to unify the profession, reduce public confu-
sion concerning the multiplicity of competing
organizations and enable the advancement of
the interests of the profession with greater
authority (see The Accountant, 1956, 1957).
The Companies Department of the Board of
Trade also perceived the utility of the conse-
quential creation of a two-tier profession
(chartered accountants and certified accoun-
tants) from the perspective of the general pub
lit, British departments of state and foreign
governments (Board of Trade, BT58/631/
COS3149, 13.11.56). A Board of Trade briefmg
note suggested that the result of the integration
“would be that the new Chartered Institute
will in future embrace accountants in practice
and the topflight accountants in the industrial
and commercial world, while the Certified will
cater for the accountants and auditors of the
smaller family businesses” (ibid.).
498 S. P. WALKER and K. SHACKLETON
The potentiality of a merger between the
ICAEW and the SIAA had been mooted on
several occasions before the formation of the
Coordinating Committee in 1942. In 1930, for
example, the issue was discussed at the annual
meeting of the ICABW but “was not favourably
received by the members generally” (ICAEW,
13-1-2(a), 1.11.35). Similarly, integration was
suggested by Stephen Killick (an Honorary
Member of the SIAA and the Lord Mayor of
London), in September 1935 but the President
of the ICABW (Plender) considered that his
Council would be averse to merger and that
“the time has long past when such a proposal
might have proved acceptable” (ibid.).
Such attitudes underwent radical revision
during the Second World War. As the registra-
tion proposals encountered opposition and the
prospect of the success of the Public Accoun-
tants’ Bill became more distant, the possibility
of a closer relationship between the ICABW
and the SIAA was increasingly perceived as an
alternative. In May 1944 it was reported that in
his annual address, the President of the ICABW
(Palmour) stated that if agreement could not be
reached on co-ordination he envisaged “the
formation of a joint committee by the Institute
of Chartered Accountants and the Society of
Incorporated Accountants and Auditors to
ensure that at any rate the two senior English
bodies can speak with one voice” (ICAEW,
MS28435/42, Box 1). The President of the
SIAA concurred that if the work of the Co-ordi-
nating Committee proved fruitless then his
Council would “embark on a partial and volun-
tary scheme with the Institute, whose views in
all matters correspond to those of the Society”
(Zbe Accountant, June 1944, p. 170).
During the late 1940s the lack of progress of
legislation for the profession resulted in the
ICABW questioning the wisdom of proceeding
further and induced a reexamination of alter-
native institutional arrangements with the
SIAA. In November 1949 the President of the
ICABW anticipated that “the absorption by the
Institute of the Society (except Municipal
Treasurers) might dispose of the necessity to
consider any larger measure of coordination”
(ICABVV, MS28435/42, Box 4). At a meeting of
the ICAEW Advisory Committee on Co-ordlna-
tion in March 1950 it was noted that “the dlffl-
culty of stating convincing arguments ln favour
of a merger was appreciated but the views of
the majority of the committee appeared to be
in favour of some form of merger” (ICABW, Co-
ordination Minute Book 1946-1951, p. 50).
However, the Council of the ICABW deter-
mined in March 1950 that it was impracticable
to continue conversations with the SIAA while
legislation for the profession was still under
consideration (KAEW, Minutes of Council,
1949-1952, pp. 92-93).
Active consideration of mergers resumed in
August 1954 when a memorandum was pre-
pared for the President and Council of the
ICAEW on the subject of the Institute’s future
relationship with ICAS and the SL4A. Hints had
been dropped at the centenary celebrations of
the Scottish societies in June 1954 that a closer
relationship between the ICABW and ICAS
should subsist (ICABW, 13-l-2). Although an
amalgamation with the Scottish Institute was
perceived as an ultimate objective of the
ICABW the time was considered inappropri-
ate. A union of the British chartered profession
would ensure that the SL4A would “be thrown
into the arms of the Association” (ibid.). Such a
“leftward” shift and the formation of a large
unified second tier with the potential power
to carry a registration bill outwith the control
of the ICAEW was perceived as potentially dis-
astrous (ibid.). The absorption of the SL4A was
therefore given priority over an amalgamation
with Scotland by the ICABW.
During the autumn of 1954 informal discus-
sions took place between the Presidents of the
ICXBW and the SIAA from which were gener-
ated the merger proposals. On learning of the
proposed integration the President of ICAS
advocated a merger with the SIAA on a federal
basis to incorporate his institute and the ICAI in
the scheme. He concurred that the alternative
prospect of an SIAA-ACCA amalgamation
should be averted for fear of the creation of a
body dangerous to the chartered profession
and considered that absorption of the SIM
CHANGE IN THE BRITISH ACCOUNTANCY’ PROFESSION 499
“would not prejudice in any way the possibility
of the formation of an Institute of Chartered
Accountants of Great Britain in the years to
come” (ibid.). The integration on a federal
basis was to come into force in November
1957 and in January 1958 the Council of the
SIAA met for the last time (Garrett, 1961, p.
330).
CONCLUSIONS
During the inter-war period the accountancy
profession in Britain comprised an expanding
set of multifarious and competing organizations
of differential status. As governments became
increasingly interventionist, particularly during
the period of total war, the institutional struc-
ture of the profession appeared to be archaic
and inappropriate for the representation of
occupational interests to an increasingly
powerful centripetal state. The prevailing cli-
mate of national unity and the envisagement
of a new post-war order during the middle
stages of the Second World War provided an
opportunistic moment for addressing the pro-
blem of the organization of the accountancy
profession.
The response of the professional associa-
tions was to constitute a peak organization
in the form of the Coordinating Committee
as the vehicle for making uniIied representa-
tions to government. On the basis of unspeci-
f i c messages from certain ministers
concerning the need for the profession to
address the question of its organization, the
Coordinating Committee became the progeni-
tor of a scheme for the licensing of public
accountants and the creation of central coun-
cils comprising representatives of professional
institutes. Although the proposed Public
Accountants’ Councils for England and Wales
and for Scotland would consult government
on matters of mutual concern their primary
object was to maintain a register of accoun-
tants in public practice. The cause of “co-ordi-
nation” thus became essentially a nom de
pl ume for registration.
Ultimately, the Coordinating Committee
failed to achieve its principal object because
its leading figures responded to the demand
for the reform of professional organization by
once more attempting registration. Such an
attempt at social closure to benefit the majority
section of a single occupational group was
alien to the prevailing consensus and collecti-
vist politics. As a result, support from suc-
cessive governments and the relevant
sponsoring ministry was deficient - each had
more important policies to frame and imple-
ment during the period of national emer-
gency, reconstructon and welfare socialism.
Further, the “coordinators” miscalculated the
power of mandarin civil servants to determine
the content and progress of legislation and the
extent to which the bureaucracy could enforce
modifications to group demands in order to
protect its own interests.
Within the profession the organic cohesion
which characterized wider societal relation-
ships in wartime was only partly achieved
among the accountancy organizations. From
1942 to 1946 in particular, internecine conflict
among some of the participants delayed the
framing of legislation for the profession. The
legacy of separate institutional development
and the construction and entrenchment of
divergent constitutional and ideological struc-
tures among the accountancy organizations
proved difficult to reconcile with the imposi-
tion of unifying zenithal bodies such as the
Coordinating Committee and the proposed
Public Accountants’ Council. Further, the long
history of attempts by successive organizations
to operate status defining closure practices and
the inter-organizational hostilities which
emerged as a result ensured that the need to
carry the occupational populace in a measure
to regulate accountancy practice proved elu-
sive and was only achievable at the price of
devising diluted proposals which were unpalat-
able to those who instigated the coordination
movement.
Despite the inability to attain its primary
objective of the registration of public accoun-
tancy, the efforts of the Coordinating Commit-
500 S. P. WALKER and K. SHACKLBTON
tee were rewarded when its leading partici-
pants were enlisted to form the Accountancy
Advisory Committee in order to implement the
auditor qualification provisions of new compa-
nies legislation. In this way, the state effectively
conferred licensing powers on the profession
in the reahn of public company audits. Further,
as a result of the discourse on co-ordination
some degree of integration in the British profes-
sion was achieved in the formation of ICAS in
1951 and the merger of the chartered societies
with the SL4A in 1957. The institutional struc-
tures which emerged from the 1950s have
since remained substantiaIly unaltered.
The study of accounting history is frequently
advocated due to its potentially supportive role
in the development of contemporary policy
making (Previts et al., 1990, pp. 3-5). The co-
ordination movement of the 1940s and 50s and
the context within which that debate was con-
ducted provides important insights for those
who continue to seek the rationalization of
the profession in Britain.
BIBLIOGRAPHY
Manuscript sources
War Cabi net, Reconstructfon Probl ems Commi ttee (Public Record Office, Kew)
CAB 117/46 Correspondence with the Institute of Chartered Accountants on Proposals for Post-War
Co-operation Between Accountants’ Societies and Future Organization of the Profession,
1942-1943.
CAB 87/l Reconstruction Problems, 1941.
Board of Trade, Compani es Department, Correspondence and Papers (Public Record Office, Kew)
BT58/446/7450 Companies Act, 1947, General Consultative Committee and Accountancy
Advisory Committee.
BT58/574/COS3409/1948 Accountancy Advisory Committee, Minutes of Meetings Concerning
Companies Act, 1947, 1948-1950.
BT58/631/COS3149 Institute of Chartered Accountants in England and Wales and the Society of
Incorporated Accountants: Scheme of Integration.
Scottfsb Home and Heal th Department (Scottish Records Office, Edinburgh)
HH1/594 Registration of Accountants, Co-ordination of the Accountancy Profession.
I CAEW (Gui l dhal l Library, London)
MS28428 Co-ordination Committee Minute Book and Sub-Committees Minute Book, 1942-1946.
MS28435/42 Boxes l-4 Co-ordination Files
MS28411/12 Minutes of Council, 1938-1942.
MS28411/13 Minutes of Council, 1943-1946.
MS28411/14 Minutes of Council, 1946-1949.
MS28423 Taxation and Financial Relations Committee Minute Book.
MS28425 Costing (Government Contracts) S&Committee Minute Book, 1942-1943.
ICAEW (MUton Keynes)
Co-ordination Minute Book, 1946-1951.
Co-ordination Minute Book, 1951-1955.
Minutes of Council, 1949-1956.
13-1-2 Absorption of the Society by the Institute.
13-1-2(a) Correspondence between Lord Plender and the Lord Mayor.
U.44 (GuiklhaII Library, London)
MS28484/12 Council Meeting Minute Book, 1940-1945.
MS28484/15 Council Meeting Minute Book, 1950-1954.
MS28484/16 Council Meeting Minute Book, 1955-1957.
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 501
ACCA (Lincolns Inn Fields, London)
Minutes, Council Meetings, 1941-1955.
ICAS (Queen Street, Edinburgh)
121/1/l The Accountants’ Co-ordinating Committee, Memoranda, Reports and Minutes,
1930-1944.
121/l/2 The Accountants’ Coordinating Committee, Memoranda, Reports and Minutes, 1948.
13/3 Joint Committee of the Chartered Accountants’ Societies of Scotland, Minute Book,
1927-1943.
13/4 Joint Committee of the Chartenzd Accountants’ Societies of Scotland, Minute Book,
1944-1947.
13/5 Joint Committee of the Chartered Accountants’ Societies of Scotland, Minute Book,
1947-1951.
130/12 The Institute of Accountants and Actuaries in Glasgow, Minute Book, 1943-1947.
BooksatldPeriodicala
The Accountant
Tbe Accountant’s Journal
l?be Accountant’s Magazine
Addison, P., The Road to 1945. Britfsb Politics and the Second World War (London: Jonathan Cape,
1975).
Armstrong, P., The Rise of Accounting Controls in British Capitalistic Enterprises, Accounting, Organha-
tions and Society (1987) pp. 415-436.
Barnett, C., The Audit of War, Tbe Illusion and Reality of Britain as a Great Nation (London:
Macmillan, 1987).
Beer, S. H., Pressure Groups and Parties in Britain, American Political Science Review (19%) pp. l-23.
Beer, S. H., Modern Britkb Politics. A Study of Parties and Presnrn? Croups
During the period of total war and its aftermath, profound changes occurred In the socio-cconomic and
political fabric of Britain. In the face of fundamental change and national crisis the multi-organized
accountancy profession was perceived as being archaic and demands emerged for the reform of its
institutions. The paper discusses the attempt to co-ordinate the profession during the 1940s in the
context of the wartime discourse on reconstruction. The analysis is conducted within a paradigm
appropriate to the period and locale of the subject: British corporatism. It Is revealed that a peak
organization to reprexnt the profession before central government was successfulry instituted in the
form of a Coordinating Committee.
Accounting, OrganlzatioonF and Sodefy, Vol. 20, No. 6, pp. 467-503, 1995
copylight 0 1995 Ekvicr science Ltd
Primed in Great Britain. All rights reserved
0361-3682/95 $9.50+0.00
CORPORATISM AND STRUCTURAL CHANGE IN THE BRITISH ACCOUNTANCY
PROFESSION, 1930- 1957*
STEPHEN P. WALKER
University of Edi nburgh
and
KEN SHACKLETON
University of Glasgow
Abstract
During the period of total war and its aftermath, profound changes occurred In the socio-cconomic and
political fabric of Britain. In the face of fundamental change and national crisis the multi-organized
accountancy profession was perceived as being archaic and demands emerged for the reform of its
institutions. The paper discusses the attempt to co-ordinate the profession during the 1940s in the
context of the wartime discourse on reconstruction. The analysis is conducted within a paradigm
appropriate to the period and locale of the subject: British corporatism. It Is revealed that a peak
organization to reprexnt the profession before central government was successfulry instituted in the
form of a Coordinating Committee. However, an attempt by the Committee to unify the profession
behind legislation to secure a legal monopoIy of public practice failed due to: the inappropriateness of
the constitutional structures of the participant organizations; their inability to subsume particukist
agendas; and, a faihxe to comprehend the enhanced power of government and mandarin civil servants
in the corporatist state. Despite its Inability to achieve its principal objective of registration, the co-
ordination movement resulted in structural changes to the British accountancy profession which have
endud since the 1950s.
It seems to me In the broad view that there are many
sion. Until the 1930s the organization of the
people who are using the War to try and make
proposals and break down barriers that they would
not have dared to do before Games M. Davies, Presi-
dent of the Glasgow Institute (IAAG), 16.8.1942, ICAS,
121/1/l, dot. 32).
The Second World War and the years of post-
war reconstruction were a formative period in
the history of the British accountancy profes
. _
profession was characterized by the increasing
proliferation of institutions. From the late
1930s concerted attempts have been made to
integrate the diffuse array of accountancy orga-
nizations. Here, the co-ordination movement of
the 1940s and 50s is analysed as a response to the
wartime state which necessitated alterations in
the institutional structure and behaviour of
l The authors gratefuRy acknowledge the financial support of the Scottish Committee on Accounting History of The
Institute of Chartered Accountants of Scotland. We are Indebted to A. J. Colquhoun, P. W. Johnston and Mrs A. Rose,
the Chief Executives and Secretaries of ICAEW, ICAS and ACCA, respectively, for access to records and permission to quote
from them. Thanks are also due to Richard K. FIeischman, Tom Lee, Paul J. Miranti, Christopher Napier and the anonymous
referees for their most constructive comments on earlier drafts of this paper.
468 S. P. WALKER and K. SHACKLETON
those, such as organized accountants, who were
engaged in the collective advancement of
interests.
The paper is responsive to the advancing
literature on the relationships between
accounting and the state (Miller, 1990) and, in
particular, the profession-state axis (Johnson,
1972; Chua & Poullaos, 1993). Further, it seeks
to build on previous historical studies which
have examined how accounting, the functions
of accounting practitioners and the linkages
between accounting institutions and the state
have responded to rapid socioeconomic
change and crisis in the form of total war
(Loft, 1986, 1994; Miranti, 1986; Armstrong,
1987; Gallhofer & Haslam, 1991).
Organizational change in the British accoun-
tancy professon during the Second World War
and in the period of post-war reconstruction
are analysed within the corporatist theory of
the state: an approach utilized by previous wri-
ters to examine state-profession relationships
and accounting regulation (Puxty et al ., 1987;
Cooper et al ., 1989; Richardson, 1989). In this
paper we draw principally on Middlemas’s
(1980, 1986) discourse on “corporate bias”
-
a diluted form of corporatism derived from
an analysis of British political history during the
20th century.
Although the ultimate object of the co-ordi-
nation movement - registration by the licen-
sing of “public accountants” - was not
achieved, its activities are crucial to an under-
standing of significant events in the history of
the profession during the immediate post-war
period such as the professional auditing provi-
sions of the Companies Act, 1947, the forma-
tion of The Institute of Chartered Accountants
of Scotland (ICAS) in 1951 and the absorption
of the Society of Incorporated Accountants and
Auditors (SIAA) by the chartered societies in
1957. The latter institutional changes secured
a degree of organizational integration which
has not substantially increased despite con-
certed efforts most notably in 1970 and 1989
(Boys, 1994, pp. 13-14).
The coordination movement has received
scant attention in the professionalization litera-
ture when compared with the salient events to
which it directly and indirectly gave rise. The
official histories of the professional organiza-
tions concentrate heavily on the contribution
of their members and institutes to the military
and civil effort when describing developments
during the 1940s. The histories of the English
(Howitt, 1966) and Scottish (ICAS, 1954;
McDougall, 1980) chartered societies barely
mention the coordination movement though
they contain discussion of the mergers of
1951 and 1957. More voluminous accounts of
co-ordination measures may be found in the
histories of the Irish Institute (Robinson,
1964) and the Incorporated Society (Garrett,
1961) though these tend to have been written
from the narrow perspective of the respective
organization.
Critical commentators have also paid insuffi-
cient attention to developments during the
1940s in explaining the move toward institu-
tional integration after the Second World War.
Macdonald, for example, perceived that from
1930 to 1946 the issue of occupational regis-
tration laid dormant (1985, pp. 217-218).
Willmott, similarly concentrated on the culmi-
nation of the coordination movement - The
Public Accountants’ Bill, 1946 - (1986, p.
568) and paid little attention to the circum-
stances of the early 1940s which gave rise to
it. We contend that the “second phase” (ibid.,
p. 569) of the organization of the accountancy
profession commenced during the Second
World War and not after the merger of the
chartered institutes and the incorporated
society in 1957.
Critical writers have hitherto tended to rely
heavily on secondary sources, and in particular,
the official institute histories when analysing
professionalism in Britain during the mid-20th
century. By contrast, this study is founded on a
variety of primary sources including relevant
journals, government papers and the records
of the principal professional organizations.
The methodological approach adopted is trian-
gulation as applied to qualitative archival
research (Denzin, 1978; Jick, 1979). Multiple
sources pertinent to the same historical
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 469
phenomena were utilized to identify conver-
gences and divergences in the accounts of the
principal actors. Such an approach also
permitted an assessment of source validation
and the illumination of contextual and holistic
perspectives.
A RESUME OF PROFESSIONAL
ORGANIZATION, 1853-1930
The institutional history of the British
accountancy profession to the mid-20th cen-
tury has been variously described as a process
of “exclusion, segmentation and merger”
(WJillmott, 1986, p. 566) and as “creation,
amalgamation and fragmentation” (Edwards,
1989, p. 277). The reasons for such descrip-
tions are apparent when the organizational
history of the profession is sketched.
From 1853 to 1879 the precursor organ-
izations of the chartered profession were
constituted primarily on a local basis in the
major legal, commercial and manufacturing
centres of Edinburgh and Glasgow (1853)
Aberdeen (1866) Liverpool and London
(1870), Manchester (1871) and Sheffield
(1877). During the 1880s and 1890s the need
to assert or defend collective professional sta-
tus resulted in schemes of national organization
(The Institute of Chartered Accountants in
England and Wales (ICAEW) in 1880, and the
Institute of Chartered Accountants in Ireland
(ICAI) in 1888) (see How&t, 1966; Robinson,
1964) or institutional cooperation (as in
Scotland during the mid-90s) (see Kedslie,
1990; Walker, 1991; Shackleton, 1995). How-
ever, the closure devices imposed by the early
chartered societies encouraged the formation
of second tier organizations of excluded practi-
tioners such as the Scottish Institute of Accoun-
tants (1880), the Society of Accountants and
Auditors (1885) and the Corporation of
Accountants Ltd (1891). The chartered socie-
ties’ close definition of public practice pre-
vented the admission to the established
societies of accountants engaged in new speci-
alisms (such as public finance and costing) thus
resulting in the institution of separate organiza-
tions of corporate treasurers and municipal
accountants (1885) and, later, of cost and
works accountants (1919).
A further expansion of second tier organiza-
tions in the first decade of the 20th century
(the Institute of Certified Public Accountants,
1903; the London Association of Accountants,
1904; the CentraI Association of Accountants,
1905) was boosted by the Finance Act, 1903
which included provisions which liberalized
taxation work (Car-r-Saunders & Wilson, 1933,
p. 2 14). Following the cessation of military con-
IIict in 1918 further organizations of excluded
and specialist accountants were constituted in
relation to Poor Law administration, auditing,
and corporate, statistical and international
work. In 1930 there existed at least 17 associa-
tions representing the profession. This “bewil
dering multiplicity of associations” (ibid., p.
213) was at variance with the increasing con-
centration of industry and alRed organizational
structures during the inter-war period (Beer,
1965, pp. 292-296).
As a result of its institutional fragmentation,
the accountancy profession in Britian has been
characterized by internecine dispute and an
inability to subsume perceived organizational
status differentials in order to achieve regula-
tion of the occupation by the state particularly
in the period from the 1890s to 1930. Nume-
rous attempts were made by the accountancy
organizations to obtain state recognition by
means of registration bills between 1891 and
1911 (MacdonaId, 1985; KedsIie, 1990;
Kirkham & Loft, 1992). All efforts failed due
to the inability of the accounting bodies to
agree on any one measure and the ease with
which contentious legislation for the profes-
sion, devoid of government support, could be
successfully opposed.
By the inter-war years, the legacy of the for-
mation of a multi-organized occupation and of
attendant episodes of inter-organizational hosti-
lity, did not auger weII for attempts to secure
the unification of the British accountancy pro-
fession. There had been a number of sources of
institutional conflict. The equating of public
470 S. P. WALKER and K. SHACKLETON
practice with professi onal accountancy
ensured that the independent, fee-earning
chartered accountants (who had been trained
in firms offering accountancy services to the
populace) looked askanse at the occupational
claims of the dependant, salary-earning cost
and municipal accountants (Loft, 1986, p.
166). Relations between organizations of char-
tered accountants and those who had
attempted to intrude on their status and mar-
ket dominance had been periodically embit-
tered since the late 19th century. In
particular, the challenges presented to the
Scottish chartered societies by the Corporation
of Accountants Ltd (an antecedent organization
of the certified accountants) during the 1890s
and 1900s left deep wounds (Walker, 1991).
Such encounters ensured that certified accoun-
tants were to be suspicious of the particularist
motives of the senior bodies and encouraged
their adherence to a vision of the profession
organized on a democratic and progressive
basis. As will be illustrated later, their exclu-
sion from earlier legislative attempts to regu-
late accountancy practice was to imbue the
certified accountants with a cynical disposition
towards the reasons why, in the 1940s they
were unexpectedly called in from the cold to
participate in discussions on the future of the
profession.
Among the chartered societies, unanimity
was seldom in evidence on the question of
the organization of the profession. The Irish
were marginalized on account of their size,
location and the ambiguity surrounding their
status as a U.K.-based institution. The Scats
were often distrustful of the intentions of their
numerically superior and more powerful
English counterparts and had become wary of
reforms emanating from London (Walker,
1995). Past attempts to achieve or maintain
market control via registration or the protec-
tion of credentials had been conducted sepa-
rately by the chartered organizations in
England and Scotland (Kedslie, 1990, pp.
249-261). At the turn of the century a scheme
to ensure the cooperation of chartered accoun-
tants in Britain was aborted (Shackleton, 1995).
Furthermore, the persistence of jealously
guarded status differentials between the socie-
ties in Edinburgh, Glasgow and Aberdeen was
not always conducive to concerted action by
Scottish chartered accountants (ibid.).
There was, however, some commonality of
interests on the question of the future structure
of the profession between the two largest
accountancy organizations in Britain by the
inter-war years. Relations between the ICAEW
and the SL4A had been gradually improving
such that in 1909 the two organizations had
jointly prepared a registration Bill which pro-
gressed to the stage of passing its Second Read-
ing (Macdonald, 1985, p. 549).
During the 1920s differences between the
accountancy organizations reemerged when a
considerable number of Corporation Bills were
presented to Parliament. One of the issues
which often arose from the legislation was elig-
ibility to conduct local authority audits. It was
almost a matter of course that one body of
accountants would object to either the fact
that they had been omitted or the inclusion
of a competitor body. However, during the
passage of the Chester Corporation Bill in
1929, the Chairman of the Local Legislation
Committee of the House of Commons com-
mented on this issue and the Select Committee
on Local Legislation recommended that the
accountancy profession:
be placed on a unified basis similar to that of other
learned professions by the incorporation of a represen-
tative body,.having control over the whole profession,
and keeping a register in which should be inscribed the
names of all fully qualified members of the professsion
(Special Report, British Parliamentary Papers, 1928-9,
vol. iv, p. ix).
The implications of the report for the poten-
tial recognition of second tier organizations
induced the established societies to request a
departmental enquiry. Following the opposi-
tion of the chartered bodies in particular, the
Goschen Committee reported in 1930 that
there was no public demand for a scheme of
registration (Registration of Accountants,
Bri ti sh Parl i amentary Papers, 1929-30, vol.
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 471
viii). Since the 193Os, and particularly from the
early 194Os, further attempts have been made
to integrate the disparate organizations of
accountants. These efforts have been largely
motivated by, and conducted in the context
of, a radically altered set of economic, social
and political infrastructures. In particular, the
increasing intervention of the state since the
1930s and the consequent centralization of
governmental institutions and power have
resulted in demands from the state and from
the accountancy organizations for the profes-
sion in Britain to speak with one voice.
THE EXPANSION OF THE STATE IN
MATURE INDUSTRIAL SOCIETY
In mature urban-industrial societies the state
has become increasingly interventionist and
the broadening scope of interference has
been attended by the enhanced power of gov-
ernmental institutions at the centre of policy
making and administration. The history of the
expansion of state activity in economic man-
agement and the provision of public services
in Britain has been extensively tracked (Hill,
1976, pp. 16-44; Hobsbawm, 1969, pp. 225-
248; Westergaard & Resler, 1976, pp. 171-179,
199-203). Perkin (1989) has noted that govern-
ment expenditure as a percentage of GNP
increased from 12.7% in 1910 to 49.3% in
1975, employees of government rose from 7%
of the labour force in 1931 to 26% in 1973 and
that this activity was financed by substantial
increases in taxation (pp. 315-316).
Although the Great War necessitated sub-
stantial control by the state of scarce resources
(see Loft, 1986, pp. 143-144) the retreat from
the mid-19th century minimalist state and the
advance from late Victorian social liberalism
was particularly marked during the inter-war
period (Stevenson, 1986, pp. 59-62). The struc-
tural problems revealed by severe depression
encouraged the theoretical development and
advocacy of managed, planned capitalism as
an alternative to failed orthodox economic pol-
icy (ibid., pp. 63-66). The protection of strate-
gic industries became a concern of government
particularly during the 1930s (ibid.). In accor-
dance with the contemporary “rationalization
movement” which stressed the economic
advantages of concentration (see Hannah,
1976, pp. 29-44; Armstrong, 1987, pp. 425-
426), governments encouraged or compelled
industrial reorganization, coordination and
amalgamation in the public utilities and
depressed industries (Musson, 1978, pp. 288-
96; Hobsbawm, 1969, p. 242). Government
intervention increased considerably from the
1940s to the 1970s in order to implement
Keynesian demand management, the welfare
state and nationalization.
INTEREST GROUPS AND THE
INTERVENTIONIST STATE
Several competing paradigms have been
developed by sociopolitical theorists to
explain the nature and distribution of power
in modem industrial capitalist societies. Marx-
ian, elitist, pluralist and corporatist perspec-
tives also encompass the organizational and
behavioural implications of the expanding
role of the state for interests such as profes
sional groups which are compelled to greater
participation in the increasingly centralized
policy-making process in order to defend or
enhance their economic, social or political
position (McLennan, 1984; Ham & Hill, 1984,
pp. 26-42).
Although Marxists consider that state inter-
vention is designed to assist capital accumula-
tion, maintain political domination or to act as
a palliative to working class agitation (Hall,
1983, p. 364) it is recognized that the increase
in state power and activity under modem capit-
alism has ensured that it is the foci for compet-
ing demands. Miliband introduced his seminal
work thus:
More than ever before men now live in the shadow of
the state. What they want to achieve, individually or in
groups, now mainly depends on the state’s sanction and
support. But since that sanction and support are not
472 S. P. WALKER and K. SHACKLETON
bestowed indiscriminantly, they most, ever more
directly, seek to intluence and shape the state’s power
and purpose, or to try and appropriate it altogether. It is
for the state’s attention, or for its control, that men
compete; and it is against the state that beat the waves
of social conflict (1973, p. 3).
Marx’s recognition that the successful
achievement of objectives was more likely
when advanced by united collectivities with a
cohesive sense of group (class) consciousness
is also pertinent when applied to the interac-
tion of particular occupations in the political
arena (Krause, 1971, pp. 84-85). More recent
neo-Marxist perspectives have stressed the
political debility of atomized individuals and
the comparative effectiveness of centralized
and coordinated working class movements
(Therborn, 1986, pp. 219-221).
Modern elite theorists such as Mills have illu-
strated that to achieve influence with those in
command positions, interest groups must
access the centres of national policy making,
become enmeshed in the all-powerful organs
of executive government; in short, become
part of the vested interests. Those groups
which represent specific national interests
and which are coordinated and coherent are
more likely to achieve successful outcomes
than those which are organizationally scat-
tered, disjointed and decentralized (1956, pp.
258-268).
American pluralists, such as Truman (1951)
and Dahl(l956, 1975) draw on Weberian con-
cepts of the multidimensionality of power and
the geocentric position of the state at the inter-
face of contending political pressures (Held,
1983, p. 39). Association and collective repre-
sentation are necessary as individuals by them-
selves have minute intluence in democratic
politics (McLennan, 1984, pp. 82-83). The
state is a marketplace - the focus of pressure
from competing representative groups each
seeking to protect or promote a specific func-
tional interest.
Elite pluralists acknowledge that certain
pressure groups secure disproportionate influ-
ence with the state on the basis of organiza-
tional, informational, economic or political
advantages. The successful achievement of
group objectives is thus dependent on the
acquisition of superior resources and institu-
tional attributes (such as representation by
coherent organizations) which enhance access
to decision makers and increases the extent to
which group demands are recognized.
Although the English variant of political plur-
alism (as advocated by writers such as Cole,
Figgis and La&i during the inter-war period)
was essentially anti-state centralist and anti-
collectivist, the exigency of the synthesization
of inclusive, self-governing and democratically
organized associations under a system of multi-
charmelled functional representation was
recognized (see Hirst, 1989; Nicholls, 1975).
Cole elucidated a “principle of coordination”
thus:
If neither any single functional association nor the pee
ple itself can be the normal co-ordinating agency in a
functionally organized society, only one possibility
remains. The co-ordinating body must not be any single
association, but a combination of associations, a federal
body in which some or all of the various functional
associations are linked together (quoted in Hirst,
1989, pp. 101-102).
The extent to which pluralism featured in
British politics in the post-war period in
response to the interventionist state was com-
prehensively analysed by writers during the
1960s such as Beer (1965) and Eckstein
(1960). Beer identified a “new group poli-
tics”, a form of institutionalized pluralism char-
acterized by an increasing tendency toward
functional rather than party representation.
The managed economy requires governments
to gain the consent and cooperation of power-
ful producer groups “representing the main
sectors of the economy: trade unions, trade
associations, and professional organizations”
(1965, p. 320).
Beer asserted that the interventionist state
offers challenges to the producer group. If it
is to take advantage of its potentially powerful
position in the managed economy the group
must mobilize, and have “a capacity for unified
decision-making and action” (ibid., p. 332)
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 473
through the medium of a national rather than a
fragmented organizational structure. The
power rewards of greater institutional cohe-
sion and concentration within the producer
group is illustrated by the extent to which
British governments have integrated trade asso
ciations and trade unions into the administra-
tive and policy making apparatus of the state
since the 1940s - groups which have been
encouraged to consolidate in order to “speak
with one voice” (ibid., p. 337) to government.
Beer’s identification of the role of the major
producer groups within a larger system of func-
tional representation lends some support to
those who describe power relations in the
modern industrial state as corporatist (see
Grant, 1985; Williamson, 1985, 1989; Cawson,
1986). Neo-corporatist theory was developed
during the 1970s in response to the limited
ability of the pluralist and Marxist perspectives
to explain the complex interactive relationship
between centralized organized interests and
the modern state (Schmitter, 1974; William-
son, 1989, pp. l-8). The nature of corporatism
has been discussed in the critical accounting
literature (Cooper et al ., 1989; Richardson,
1989). The most oftquoted definition of
“ideal” corporatism is Schmitter’s:
Corporatism can be defined as a system of interest
representation in which the constituent units are orga-
nized into a limited number of singular, compulsory,
noncompetitive, hierarchicalIy ordered and function-
ally differentiated categories, recognized or licensed
(if not created) by the state and granted a deliberate
representational monopoly within their respective cate-
gories in exchange for observing certain controls on
their selection of leaders and articulation of demands
and supports (1974, pp. 93-94).
Cawson has provided a definition of neo-
corporatism which also highlights the repre-
sentative and implementational functions of
organized groups:
Corpomtism is a specific sociopolitical process in
which organizations representing monopolistic func-
tional interests engage In political exchange with state
agencies over public policy outputs which involves
those organizations in a role that combines interest
representation and policy implementation through
delegated SeIf-enforcement (1985, p. 8).
Pluralistic processes of interest articulation
involve representation by a large number of
competing interests who lobby for favourable
outputs from the state. By contrast, under cor-
poratism a smaller number of noncompetitive
organizations exist not only to represent func-
tional interests but also to participate in the
implementation of policy decisions. The latter
is facilitated by the exercise of disciplinary
powers by the leaders of the organization. As
the state has become more heavily involved in
economic management, corporatist relation-
ships developed between governments and
the principal economic interests in advanced
capitalist society, primarily organized capital
and labour.
Studies of the prevalence of macro-corpotat-
ism in western nations reveal that corporatiza-
tion in Britain has been comparatively weak
(see Williamson, 1989, pp. 148-15 1). Histori-
cal investigations also show the partial and tran-
sitory nature of corporatist tendencies in
Britain. Beer adopted the term “quasi corporat-
ism” (1956, p. 7) Crouch has applied the term
“bargained corporatism” to post-war relations
between governments and organized capital
and labour (1979) and later noted the oscillat-
ing and experimental character of British cor-
poratism and its conspicuousness in periods of
world war (1986, pp. 208-209).
Middlemas contended that the system of
government in Britain from the 1910s to the
mid-1960s was characterized by an informal
“corporate bias” (1980, p. 383) in which
employer associations, trades unions and other
groups assumed the status of “governing insti-
tutions” as opposed to mere pressure groups
(ibid., p. 373). The tripartite relationship
between the state and representatives of orga-
nized capital and labour (which was induced
by industrial crisis in 1911- 1914 and given
further impetus by the need for the control of
scarce resources during war) explains the rela-
tive political harmony which persisted in
Britain after 1918 when compared with the
474 S. P. WALKER and K. SHACKLETON
dislocation experienced ln some other
European countries (ibid., pp. 18, 376).
Governing institutions enter into interdepen-
dent and cooperative relationships with
government, have functional responsibilities
bestowed upon them, are rewarded with pre-
ferential access to policy makers, and thereby
become an integral part of the extended state.
The creation of governing institutions is
encouraged as the state is “avid to admit repre-
sentative bodies to its orbit rather than face a
free-for-all with a host of individual claimants”
(ibid., p. 20). Hence, in industrial politics, cen-
tralized bureaucracies to represent labour (The
General Council of the Trades Union Congress
in 1921) and management (the Federation of
British Industries in 1916) were instituted
(Middlemas, 1986, pp. 3-5). The promotion
of powerful representative interest groups to
the status of governing institution is dependent
on the acquisition of power enhancing traits
such as size of membership, organizational
cohesiveness, central control, institutional col-
laboration, the acquisition of specialist skills,
unified adherence to national objectives, and
the ability of a group to be of service to the
government (ibid., pp. 9-10).
For social historians such as Perkin (1989)
informal corporatism is the institutional frame-
work within which a professional society based
on “career hierarchies of specialized occupa-
tions” (p. 2) replaced a class society in Britain
from the later inter-war years. In a professional
society, corporate organization has been
encouraged by the need of occupational hier-
archies to compete with one another ln the
struggle for income, power and the attention
of the interventionist and distributive state
(ibid., p. 9). The collective organization of pro-
fessional interests is necessary in order to
advance occupational status and control
(ibid., p. 288).
The theoretical perspectives outlined above
recognize that the interventionist state is an
arena for competition between contending
interests who input demands and seek favour-
able outputs (Levine, 1990). The approaches
are consistent in their recognition that advanta-
geous outcomes are more likely to be secured
when presented by unilied representative orga-
nizations. The evidence suggests however, that
the most appropriate framework for the analy-
sis of the state-profession relationships and the
behaviour of accountancy organizations in
Britain during the period under study is corpor-
atism and in particular, the diluted, U.K.-speci-
fic variant derived from historical analyses such
as those of Beer, Middlemas and Perkin.
Corporatism is not a cohesive concept
(Williamson, 1989, pp. 187-202). A lack of defi-
nition has resulted in disputes concerning
issues such as whether corporatism encom-
passes bilateral relations between, for exam-
ple, the state and professional organizations
or is restricted to tripartism involving the state
and the interests of capital and labour (Grant,
1989, p. 32). The theoretical weaknesses of
corporatism have induced critical accounting
commentators to utilize it in forms modified
by, or in combination with, for example, the
Offe-Habermas theory of the state (Cooper et
al., 1989) and Gramsci’s concept of hegemony
(Richardson, 1989). In a similar vein this study
appropriates as its framework, corporatist mod-
els tempered by the results of historical inves
tigations pertinent to the time and locale of its
subject matter.
It will be shown that many elements of
Middlemas’s theory of corporate bias are
germane to an understanding of the interaction
between the accountancy profession and the
state and the relationships between the organi-
zations of accountants during the 1940s and
50s. Not only does Middlemas’s analysis hlgh-
light the enhanced receptiveness of govern-
ments to the demands of well-organized
collective groups, it also reveals the multi-
farious nature of patterns of institutional beha-
viour and the extent to which corporate bias
can be detected in areas other than industrial
politics (1980, p. 374). Middlemas’s work also
reveals: the diversity of interest/state relation-
ships; the determinants of the timing of a func-
tional group’s metamorphosis to the status of
governing institution (1986, p. 10); the poten-
tial of such transformation for the creation of
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 475
new conflicts between the governing institu-
tion and its constituents (1980, pp. 21, 372-
373); and, the significance of the maintenance
of an interdependent relationship between the
governing institution and the state. Also high-
lighted are the position of deviants and mino-
rities excluded from the corporate bargaining
process (ibid., pp. 19-20, 376); the significance
of departmental civil servants in the process of
political bargaining (1986, p. 1); and, the infor-
mal, malleable and covert nature of the inter-
action between state agencies and governing
institutions which is only revealed by thorough
historical investigation (1980, p. 19).
INTERVENTION, CORPORATE BIAS AND
THE RECONSTRUCTION MOVEMENT,
1939- 1942
The extent to which producer groups were
advantaged by the institution of centralized and
coherent organizations was to be recognized
by the disjointed accountancy profession dur-
ing a climacteric in the history of state interven-
tion and corporate bias in Britain: the Second
World War.
The idea that the Second World War induced
a socioeconomic revolution has recently been
subject to some revision among historians
(Smith, 1986, pp. viii-x). Few dispute, how-
ever, that the exigencies of war resulted in a
substantial shift towards dynamic state control
and regulation as indicated by an increase in
government expenditure from 51 blllion in
the year before the outbreak of conflict to
a.2 billion ln its linal year and a doubling in
the number of civil servants (Perkin, 1989, pp.
407-409). The discourse on the concept of a
state managed economy and government
responsibility for public welfare which had
emerged during the later Inter-war years was
necessarily put into practical effect on a sub
stantial scale when the realities of total war
became apparent (Stevenson, 1986, pp. 68-
69): “Rearmament, bombing, evacuation, food
rationing, military and industrial conscription
- all gave an existential reality to the organic
conception of society in a way that had never
been achieved by abstract analysis” (Harris,
1986, p. 236).
From the end of 1940 the extent to which
‘governing institutions’ had become engaged in
a ‘political contract’ with the wartime state to
organize and control manpower, consumption,
agriculture, manufacturing and finance was
such that Britain fell “only marginally short of
the corporate state” (Middlemas, 1986, p. 44).
McCrone et al . have concurred that the Second
World War “gave a massive boost to ‘corporate
bias’ in Britain, for the wartime government
actively sought to bring labour, industry and
the City round the governing table” (1989, p.
47). In particular, the agency and advisory rela-
tionships between the trades unions and the
Ministry of Labour, employers organizations
and the Ministry of Supply, and financial inter-
ests and the Treasury were crucial to the mili-
tary and civil effort and provided participating
groups with unparalleled access to public pol-
icy making institutions (Middlemas, 1986, pp.
17-45; Perkin, 1989, pp. 321-324). Represen-
tatives of professional accountants were also to
develop a similar series of associations with
several government departments during the
war.
Changed attitudes towards the role of the
state, its obligations to the citizenry and the
participatory function of representative orga-
nized interests were epitomized in the war-
time reconstruction movement. The discourse
on reconstruction was to culminate in the pre-
paration of official reports on social security,
health, full employment, town planning and
education which became the blueprints for
the consensus politics of the immediate post-
war era (Addison, 1975, pp. 165-189). Under-
lying the plans for a better Britain was “the
new ideology of ‘the middle way’ [which]
spoke always of the rational and centralized
control of resources, and the priority which
must be given to social welfare” (ibid., p. 183).
From an early stage of the conflict and parti-
cularly from the emergency induced by
Dunkirk and the fall of France in mid-1940,
widespread discussion about a new post-war
476 S. P. WALKER and K. SHACKLETON
order developed. As Barnett (1987) has noted:
“while in 1940-41, Winston Churchill and the
nation at large were fighting for sheer survival
in the face of Nazi Germany’s then victorious
power, members of the British cultural elite
had begun to busy themselves with design stu-
dies for a ‘New Jerusalem to be built in Britain
after the war was won” (p. 11). Concern about
reconstruction at a time of military crisis is
explained in the official history of the war as
an attempt to “fuse the will to victory with
aspirations for a better world” (Hancock &
Gowing, 1949, p. 534) and to offer future
rewards for sacrifices made in war. In 1941-
42 reconstruction caught the public imagina-
tion, was the subject of extensive media atten-
tion (Rarnett, 1987, pp. 21-22) and resulted in
the formation of a plethora of reconstruction
committees and reports within and emanating
from, a diversity of public and private institu-
tions ranging from political parties to the
Jockey Club (Harris, 19sG, pp. 236-238;
Calder, 1992, p. 545).
Middlemas has explained the extensive inter-
est in reconstruction thus:
At an exceptionally fluid time, normal barriers to poli-
tical discourse had been lifted; the future was to be
discussed and competed for, in a contest where the
stakes were limited only by external factors, and where
the rules (that this activity was strictly conditional on
the greater business of winning the war) were plain but
simple (1986, p. 47).
In February 1941 a Reconstruction Problems
Committee of the Cabinet was instituted and
was followed by a Ministry of Reconstruction
in November 1943. The Minister who headed
the former from February 1942, Sir William
Jowitt, was to receive the attention of another
group interested in the problems of the post-
war world: professional accountants.
Accountants and reconstructi on
Harris has commented that “An historian
who surveys the wartime literature on recon-
struction is soon struck by the fact that a com-
mon language of visionary patriotism and a
common sense of national unity continued to
mask an immense diversity of values and goals”
(1986, p. 238). A review of the reconstruction
items contained in the major professional
accountancy journals during 1940-42 cont%ms
this perception. Contributors were anxious to
highlight the service which the accountancy
profession could render during and after the
war but generally considered that this could
only be achieved by a potentially self-inter-
ested measure: the unification and/or registra-
tion of the profession. It was asserted in a letter
to The Accountant in March 1942 that “before
accountants allot themselves the role of specia-
lists for curing national ills in the post-war per-
iod, should they not first of all learn to speak
with one voice, and that a voice of authority”
(p. 106). The disunity of the profession was
anomalous to the organic cohesion of a popu-
lace united by a common threat of Nazi tyr-
army. The time was ripe for the professional
organizations to place national duty above
petty snobbery: “it may be hoped that the shar-
ing of common problems, caused by war con-
ditions, will produce a sense of solidarity in the
profession which will be of tangible benefit
afterwards” (The Accountant’s Magazi ne,
1941, p. 412; see also Z&e Accountant, 1942,
p. 106, The Accountant’s Magazi ne, 1942, p.
211).
Discussion about the structure of the accoun-
tancy profession was also encouraged by a mea-
sure of integration during the period of the
discourse on the profession’s role in post-war
society. In March 1939 the London Association
of Certified Accountants Ltd and the Corpora-
tion of Accountants Ltd amalgamated as the
Association of Certified and Corporate Accoun-
tants Ltd (ACCA). In the autumn of 1941 the
Institute of Certified Public Accountants joined
the new association. The merger resulted in
E??e Accountant re-asserting the need for gov-
ernment departments (who were assuming
substantially greater control of resources) to
be approached by a less confusing array of
accountancy organizations and confirming
that “The present war has illustrated only too
clearly how essential it is that the profession
should be able to speak and act as an organised
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 477
whole” (1941, p. 207). The prevailing mood
was aptly summarized in a report of the Policy
Committee of the ACCA in May 1943:
Today there is a change of attitude towards the subject
of organising the profession, due no doubt to a change
in outlook in regard to social and economic reconstmc-
tion. There is a demand - and it is a very popular
demand at the present time - for the creation of a
new pattern of living from which the defects of the
present pattern shall be eliminated (KAEW, MS28435,
Box 1).
INTERMEDIATION: GOVERNMENT AND
THE ACCOUNTANCY PROFESSION, 1939-
1957
Central to corporatist analysis is the concept
of intermediation: interest associations not only
assume representative roles but are also
accorded regulatory and public policy imple-
mentation functions by government (William-
son, 1989, pp. 98-118). A gradation of
regulatory and implementational structures
may be encompassed within corporatism. The
state may devolve total responsibility for the
discharge of policy on an interest group -
the latter becoming a direct agent of the
state. An alternative relationship is the estab-
lishment of “private interest governments” in
which producer groups assume a self-regula-
tory, quasi-public status (Streek & Schmitter,
1985; Cooper et al., 1989). Weaker forms of
corporatist intermediation border on pluralism
and include representation on state regulatory
agencies; the integration of interests in policy
formation processes (Schmitter, 1982), or
merely the existence of a less tangible “spe-
cial relationship” between organized func-
tional interests and the state (Williamson,
1989, p. 85).
Middlemas’s theory of corporate bias empha-
sises the flexible, cooperative and collaborative
relationships between interest associations and
government in Britain. Governing institutions
are not formally incorporated into the state.
Rather, they are recognized as bargaining part-
ners with privileged access and devolved
functions. The emphasis of corporate bias on
cooperation and the integration of interest
leaders in the political process bears a close
resemblance to the minimal corporatism
expounded by Panitch (1980) and utilized by
Richardson (1989) in his study of accounting
regulation and the profession in Canada.
Accountants and i ntermedi ati on
During the Second World War and the
period of post-war reconstruction, members
of the accountancy profession, became exten-
sively involved in an interplay of mutually
dependent and symbiotic relationships with
the state which ranged from the provision of
expert advice to participation in policy imple-
mentation. The operation of monopolistic and
heavily regulated markets in wartime required
the services of accountants for audit and con-
trol functions.
At the end of 1939 an Accountants Advisory
Selection Panel comprising representatives of
the principal professional associations was
established to recommend practitioners to the
Ministry of Supply who would assist govern-
ment in the development and implementation
of controls on raw materials (me Accountant,
1939, p. 624). Eminent accountants were co-
opted to several government departments in
an administrative or advisory role. During the
first four months of 1940 senior accountants
were appointed as: financial advisers to the
Air Council and the Ministry of Shipping; Dep-
uty Director-General of Statistics at the War
Office; and, Controller of Salvage in the Minis-
try of Supply (ibid., 1940, pp. 2, 377). A past
president of the SIAA was appointed as Con-
troller of Costings at the Ministry of Supply
(Garrett, 1961, p. 212).
Accountants were appointed to Local Price
Regulation Committees, selected as inspectors
to ensure the observance of price orders and
their knowledge of costing and price determi-
nation was enlisted by the Central Price Regu-
lation Committee (ibid., p. 221; also Hargreaves
& Gowing, 1952, pp. 558-559). The Board of
Trade discovered that its staff of 2000 was
insufficient to deal with new responsibilities
478 S. P. WALKER and K. SHACKLETON
in relation to the implementation of wartime
controls. The Board therefore expanded its
complement to 6500 and found the accoun-
tancy profession a particularly fruitful source
of additional administrative personnel (Han-
cock & Gowing, 1952, p. 135).
In common with the representatives of other
occupational associations during the war,
accountants were enlisted by the state to facil-
itate the optimal utilization of the available
supply of labour. From the early stages of the
war a committee of representatives from the
principal accountancy organizations was
formed to liaise with the Ministry of Labour
on the status of accountancy as a reserved
occupation. The Committee also participated
in the compilation of a register of practitioners
who had made themselves available for work in
government departments. Accountants sat on
Reserved Occupation Boards and in May 1941
Pmctising Accountants Committees consisting
of representatives of the professional associa-
tions were established in England and Wales
and in Scotland to assist the Ministry of Labour
in dealing with applications for deferred call-
ing-up and de-reservation following severe
labour shortages in accounting firms (The
Times, 28 May 1941, p. 5; The Accountant,
1941, pp. 74, 402). According to Garrett
(1961) these committees “enjoyed the com-
plete confidence of the Ministry” (p. 213). A
close cooperative relationship between the
profession and the Ministry of Labour was to
subsist throughout the war and culminated in
the participation of accountants in resettlement
and education schemes for ex-servicemen.
Advisory committees and panels comprising
representatives of the professional organiza-
tions were constituted at the request of other
government departments such as the Inland
Revenue and the Board of Trade in 1942-
1943 to consider matters such as the adminis-
tration of Excess Profits Tax, post-war fiscal
policy, business financing and the limitation
of supplies (see SIAA, MS28484/12). Internal
committees were also established within the
institutes for the purpose of advising govern-
ment and monitoring public policy. In June
1942, for example, the ICAEW established a
Taxation and Financial Relations Committee
as a direct response to comments by the
Chancellor of the Exchequer that: “it was
open to expert bodies to confer with the
Inland Revenue with a view to seeing whether
any practical steps within the scope of existing
policy should be taken” (ICAEW, MS28423, p.
2). The Taxation and Financial Relations Com-
mittee was not, however, only to submit
recommendations (via the Council of the
ICAEW) to the Treasury and the Inland
Revenue. The results of its deliberations on
the need for legislation concerning any aspect
of the financial relations between government
departments and the business community were
to be forwarded to relevant ministries (ibid.).
The Taxation and Financial Relations Commit-
tee also established subcommittees on the sub
jects of taxation, post-war finance and costing.
The Costing (Government Contracts) Sub-Com-
mittee was instituted to devise a memorandum
on uniform costing systems for submission to
ministries where it would be used for post-
war industrial planning. Representatives of the
Ministry of Aircraft Production and the Ministry
of Supply consulted the Costing Sub-Commit-
tee on costing problems with the result that
arrangements were made “whereby more of
the work might be undertaken by the Profes-
sion” (KAEW, MS28425, p. 1).
The Co-ordinating Committee
The institution of a peak organization of the
British accountancy bodies to represent the
profession before the organs of central govern-
ment was a manifestation of a confluence of
two developments. Firstly, the collaboration
of British accountants with government during
the early years of the war and, secondly, their
participation in the reconstruction debate. The
formation of government instigated commit-
tees of accountants to consider labour, pricing
and fiscal problems induced a greater degree
of organizational cooperation among the
accountancy bodies (ACCA, Minutes,
28.4.41). Improved access to policy makers
had revealed the significance of making uni-
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 479
fied representations to government. Further,
as the immediate threat to Britain’s security
began to recede ln 1942 reconstruction
came to the fore ln a “broad and rising tide
of New Jerusalemism” (Barnett, 1987, p. 24).
The time was considered ripe for addressing
the complexion of the accountancy profession
in the post-war period.
The formation of a Joint Consultative Com-
mittee of the principal accounting bodies had
been suggested before the Council of the SIAA
during the summer of 1941 and the Council of
the ICAFW had considered the structure of the
profession early in 1942 following the circula-
tion of a pamphlet within the profession enti-
tled “Time We Got Together” (ICAEW,
MS28411/12, p. 315). Following informal dis-
cussions between the Presidents of the ICAEW
(Palmour, who was the Chairman of the Prac-
tising Accountants Committee) and the SIAA
(Witty), the Council of the ICAEW resolved
on 8th July 1942 to discuss “matters generally
affecting the Profession” (ibid., p. 342) with
the SIAA. Thereafter, the President of the
ICAEW also issued invitations to the ACCA
and a prominent Scottish chartered accountant
in London, to attend an informal meeting of
representatives of the accounting bodies on
7th August. It was agreed at the meeting that
the approval of the Councils of the participat-
ing associations should be sought for the insti-
tution of an informal committee (the Co-
ordinating Committee) to consider the co-ordi-
nation of the profession when approaching
government departments (ICAEW, MS28428,
pp. l-2).
The first formal communication between the
accountancy profession and government perti-
nent to organizational coordination occurred
in a contemporaneous development which
related to reconstruction. On 7 July 1942 the
Secretary of the ICAEW wrote to Sir Wllliam
Jowitt’ (the Minister responsible for recon-
struction), in the following terms:
There is a feeling amongst the Members of the Institute
that they would Eke guidance on Post War Reconstruc-
tions. Several of the London Members have asked for a
meeting to be arranged at which Post War Problems
could be discussed (War Cabinet, CAB 117/46, f. 1).
A further exchange of letters set up a
meeting between Jowitt and representatives
of the ICAEW, including its President on 24
September. It had been suggested by Jowitt’s
department that a suitable subject for discus-
sion at the meeting would be cost accounting
and its significance in the context of post-war
industrial organization. Departmental officials
were interested in the accountants’ opinions
on the use of costing as a means of ensuring
efficiency in a noncompetitive environment of
state controlled monopolies (ibid., f. 9). The
civil service minutes of the meeting duly
records lengthy discussion on this topic but
also notes that the Minister “stated his view
that a high standard of accountancy qualilka-
tions should be required after the war from all
in the profession in order that the public
should be assured of expert service” (ibid., f.
16). Jowitt offered his full support for any pro-
posals to establish a high standard of qualitka-
tion if derived from collaboration between the
accountancy bodies.
The official minute does not accord with
reports which emanated subsequently from
the ICAEW representatives present at the meet-
ing. According to their version Jowitt was
poorly briefed on cost accounting and had
put the question directly “Why do you not
put your own house in order? ” (ICAS, 121/l/
1, dot. 32). The Minister was quoted as saying
that accountants should get together and reach
’ Wiiiiam Jowitt was to prove a supportive partner in the effort to coordinate and regulate the accountancy profession. His
interest in the profession is Likely to have stemmed from his involvement in the Royal Maii Steam Packet Ltd Case of 193 1
(Edwards, 1989, pp. 148-155) when he was Attorney-General. Jowitt was to write that “Of aii the cases with which I have
been concerned, none has ever caused me more anxiety” Gowitt, 1954, p. 104). He was known to hold strong views on
accounting, auditing and public propriety (Heuston, 1987, p. 83).
480 S. P. WALKER and K. SHACKLETON
agreement as to who is an accountant (ICAS,
13/3, p. 453), that he would be prepared to
pilot relevant legislation and that if the profes
sion failed to address the issue then the govern-
ment would. During the later protracted
negotiations concerning the structure of the
profession, the accountants’ version of the
meeting with Jowitt was further refmed in
order to advance the cause of the most fervent
advocates of institutional reform. By February
1943, the President of the ICAEW, Palmour,
was minuted as stating to the representatives
of the Scottish chartered societies that “the
question of costing was never raised” (ICAS,
121/1/l, dot. 24).
When the informal committee of representa-
tives of the accountancy associations recon-
vened on 5 October 1942, its chairman (also
Palmour), utilized the alleged comments of
Jowitt as evidence of official support for the
institution of more than a peak organization
of accountants with which to interface with
government. Palmour reported that Jowitt had
stated that “the Accountancy bodies should get
together and form some scheme for the co-
ordination of the profession” (ICAEW,
MS28428 p. 3). Thereafter, although Palmour
hoped that the ultimate outcome of discussions
on the future of the profession would be its
institutional unification as a single body
OCAS, 121/1/l, dot. 5), “co-ordination” soon
became a cloak for registration. In October a
sub-committee of the Coordinating Committee
met to explore the closer union of the profes-
sional bodies. Almost immediately the attention
of committee members was focused on the
potential for closing off the practice of public
accountancy: “a general discussion took place
as to what form cooperation should take. It
was generally agreed that the recognised
accounting bodies should retain their titles
with one representative Council who would
be responsible for issuing certificates of prac-
tice and a supervisory examination body”
(ICAEW, MS28428 p. 5).
By November 1942 a memorandum propos-
ing the establishment of a Public Accountants’
Council had been composed by the Secretary
of the ICAEW. The proposed Council would
eventually supplant the Coordinating Commit-
tee in representing the profession before
government departments. The principal func-
tions of the Council were, however, less altruis-
tic: it would maintain a register of public
accountants, grant licenses to practitioners
and exercise disciplinary powers (ibid., ff. 9-
14).
The proposals emanating from the Co-ordi-
nating Committee soon encountered difficul-
ties. From the outset the Scottish chartered
societies questioned the need to examine the
organization of the profession during the war.
Palmour considered that the Scats were “being
difficult” and requested Jowitt to intervene
(War Cabinet, CAB 117/46, f. 17). Jowitt duly
wrote to the Secretary of State for Scotland in
October 1942 urging him to encourage the
involvement of the Scottish CAs (ibid., f. 19).
Following exhortations from Palmour that not
only Jowitt but the Board of Trade, the Inland
Revenue, the Ministry of Labour and the Chan-
cellor had urged the accountancy profession to
form a central representative body, the Scottish
chartered societies reluctantly determined in
November to participate in the negotiations
on the future of the profession (ICAS, 121/l/
1, dot. 28).
By March 1943, when agreement had been
reached to proceed with proposals for a sepa-
rate Public Accountants’ Council for Scotland,
the Coordinating Committee considered that
its plans were sufficiently advanced for the pre-
sentation of a draft bill to government. Jowitt
accordingly introduced the proposals to the
relevant minister - Hugh Dalton, the Presi-
dent of the Board of Trade.* The Board of
L It was imperative that the co-ordination proposals had a sponsoring ministry. Due to the pressure of parliamentary
business during the war private members bills were disallowed. Thus it was necessary for a government department to
support and process legislation through Parliament.
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 481
Trade was soon to discover that the proposals
raised “questions of considerable difficulty”
(War Cabinet, CAB 117/46, f. 40). Following
informal soundings from the Federation of Brit-
ish Industries (FBI) (which had opposed regis-
tration in 1929-30) and the National Chamber
of Trade, it was reported to Jowitt in June 1943
that no government action was desirable at
present (ibid., f. 44).
Although meetings took place (at Jowitt’s
suggestion) between representatives of the
profession and the FBI in August 1943 to
resolve differences particularly on the question
of delining a “public accountant” the FBI did
not withdraw its opposition to the registration
proposals. According to Palmour: “the Federa-
tion of British Industries are, as usual, merely
being obstructionist to something which has
not emanated from themselves” (ibid., f.
53A). By February 1944 members of the Co-
ordinating Committee began to question pro-
ceeding further with the proposals (ICAEW,
MS28428, ff. 53-54). Although support had
been forthcoming from Jowitt, the Board of
Trade was negative as was the FBI - a major
producer group. Discord existed between the
Scottish chartered accountants and the ACCA
over a proposal to establish a separate Public
Accountants’ Council for Scotland and the issue
of the duration of training in the office of a
practising accountant required for obtaining a
license. However, the ICAEW-SIAA axis deter-
mined to make further progress by addressing
divisions between the participating profes-
sional organizations and seeking compromise
proposals.
The Publ i c Accountants’ Bi l l , 1946
By February 1946 a compromise was
reached on the question of the duration of
training and in the spring the veil of secrecy
which had surrounded the negotiations to
“coordinate” the profession via registration
was dropped. The product of the protracted
deliberations of the Coordinating Committee
- The Public Accountants’ Bill - was
revealed to a wider audience. l&e Accountant
hailed the Bill as “a veritable landmark in the
history of the profession” (1946, p. 276) due to
its potential for alleviating internecine strife
“particularly in regard to approaches made
from time to time between the national
Government and the profession” (ibid., p.
290).
The Public Accountants’ Bill attempted a
form of registration without organizational inte-
gration. The President of the ICAEW asserted
that “the paramount principle underlying the
proposals is that each body retains its separate
identity, its separate designations and its sepa-
rate control . . our principal object is to co
ordinate, by means of the need to obtain a
license, all those members of our profession
who wish to carry on the practice of public
accountancy” (ibid., p. 335). The members of
the Institute of Municipal Treasurers and
Accountants and the Institute of Cost and
Works Accountants were excluded from the
provisions of the Bill on the grounds of their
not being involved in the practice of “public
accountancy”.
The Public Accountants’ Bill was approved
by large majorities of the members of the insti-
tutes represented on the Co-ordinating Com-
mittee at extraordinary meetings on 4 June
1946. The Bill was then referred to the Co-ordi-
nating Committee for final amendment. As the
detail of the Bill was further scrutinized, an
increasing number of problems arose, particu-
larly in relation to the definitions of “public
accountant” and “public accountancy”. The
terms were defined in the Bill as follows:
“Public Accountant” means a person, who carries on a
Public Accountancy practice and who, in connection
with that practice, offers his services for reward to
members of the public, except that it does not include
a person, who carries on such a practice as part of and
as subsidiary to his principal business or practice;
“Public Accountancy” means the preparation, investiga-
tion, audit and certification of balance sheets, profit and
loss accounts and statements of income and expendi-
ture or other similar accounts, or any one or more of
those functions (The Accountant, June 1946, p. 305).
The position under the Bill of occupational
groups such as income tax experts, whose
482 S. P. WALKER and K. SHACKLETON
principal business was the preparation or inves-
tigation of accounts, was ambiguous. Others,
such as accountants employed in local and cen-
tral government were affronted by their exclu-
sion given that they performed accounting
functions in “public” institutions. By August
1946 a consolidated list of 47 suggested
amendments was prepared for consideration
and in November the Parliamentary Agents
for the Bill suggested that the Coordinating
Committee consider substantial alterations on
“major points of difference” which had also
been raised by Commissioners of the Inland
Revenue and the Board of Trade (ICAS, 121/l/
2, dot. 7).
The impetus behind the Public Accountants’
Bill was being frustrated and its difficulties
were to be compounded by its embroilment
in legislation of greater moment. The appear-
ance of the Companies Bill, 1946 would ensure
that the implementation of the provisions con-
tained in the Public Accountants’ Bill became
much less pressing.
The Companies Act, 1947
In June 1945 the Cohen Report on Company
Law Amendment was published and recom-
mended that the practice of corporate auditing
by unqualified persons be outlawed. The
Report suggested that audit appointments be
limited to the members of professional insti-
tutes currently eligible for the office of “pub-
lic auditor” under industry specific legislation
(p. 65). The resulting Companies Bill, 1946
contained a provision that auditors were to
be selected from among the members of a
U.K. body of accountants recognized by the
Board of Trade.
The Coordinating Committee was informed
in December 1946 that the Board of Trade had
framed the clause relating to the qualification
of auditors “with the Public Accountants’ Bill
in mind” and that its provisions would be oper-
ated “in the closest possible consultation with
the Coordinating Committee”
(ICAm,
MS28435/42, Box 2). Senior accountant repre-
sentatives recognized that the audit provisions
might negate the need for the Public Accoun-
tants’ Bill and urged the Board of Trade to
incorporate a clause in the Companies Bill to
the effect that future legislation for the accoun-
tancy profession would not be prejudiced. The
Board of Trade assured the Coordinating Com-
mittee that the auditor qualification clause was
temporary but necessary as a Public Accoun-
tants’ Bill could not be passed before 1950
given the pressure on parliamentary time
(ICAS, 121/l/2, dot. 6).
In July 1947, the Coordinating Committee
attempted to rejuvenate the Public Accoun-
tants’ Bill by announcing that difficulties had
been overcome and that the draft legislation
had been formally submitted to the Board of
Trade with a request for early consideration
by Parliament (The Accountant, 1947, p. 14).
Once again, however, the Board of Trade effec-
tively placated the Bill’s promoters by the
establishment during the autumn of 1947 of
an Accountancy Advisory Committee. This
committee was to advise on the working of
the accounting provisions of the consolidating
Companies Act which were to come into force
on 1 July 1948.
The Accountancy Advisory Committee
In December 1946 it had been suggested by
the Board of Trade that “the Coordinating
Committee would be available as a ready
made consultative committee” on the opera-
tion of the audit qualification clause of the
Companies Act (ICAEW, MS28435/42, Box 2).
In April 1947, E. H. S. Marker, the Principal
Assistant Secretary (Insurance and Companies
Department) at the Board of Trade, noted that:
The problems in regard to accounts are of a highly
technical nature and will need a good deal of working
out before the provisions are put into force I
suggest a special committee on this matter also of a
consultative nature something along the lines of
the Co-ordinating Committee (Board of Trade, BT58/
446/7450, 24.9.47).
In October, Marker, together with other
senior officials in the Insurance and Compa-
nies Department, discussed membership of
the proposed advisory committee with Sir
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 483
Russell Kettle who was a member of the
ICAEW Council and of its Parliamentary and
Law Committee. Sir Russell had assisted the
Board in drafting companies legislation. It was
concluded that only the English and Scottish
chartered bodies and the Incorporated accoun-
tants should be represented on the committee.
The episode revealed the persistence of a con-
descending disposition towards the ACCA
among senior bureaucrats and chartered
accountants despite the participation of certi-
fied accountants on the Coordinating Commit-
tee. Marker suggested that representatives of
the ACCA could be excluded from member-
ship of the advisory committee on the grounds
of their being “numerous, but unimportant
and, in Kettle’s view, useless” (ibid.,
30.10.47). He added that “We could always
call them in if necessary. It would be embarras-
ing, on application from important companies
under the new Act, to have to consult someone
not of the highest calibre” (ibid.).3
The Accountancy Advisory Committee com-
prised many of the leading members of the co-
ordination movement and from its first meet-
ings in February 1948 its principal concern
was the definition of those qualifying bodies
whose members were to be eligible to conduct
corporate audits (Board of Trade, BT58/574/
COS3409/1948). The Advisory Committee was
to assume more than a consultative function.
Its existence ensured that the mainstream
accountancy bodies were effectively given
power by the Board of Trade to adjudicate
over the claims of those second tier organiza-
tions of accountants which sought the status of
a qualifying body under the audit provisions of
the Companies Act. Marker prepared a memor-
andum on the functions of the Committee and
determined that “we can make our license sub
ject to whatever conditions we think proper
and a license can be revoked if the conditions
are not complied with” (ibid.). As a governing
institution, the Accountancy Advisory Commit-
tee was effectively empowered to select a de
facto register of corporate auditors.
During May 1948 the Accountancy Advisory
Committee considered applications for recog-
nition under the auditor qualification clause
of the Companies Act from a number of orga-
nizations of accountants and individuals with
non-U.K. qualifications.* All institutional appli-
cations were rejected or deferred on the
grounds that the members were not qualified
by examination or that the examinations
passed were of a low standard. Although the
Committee arrived at its conclusions primarily
on the basis of such meritocratic criteria, the
prospect of “fee snatching” if recognition was
granted to junior bodies also featured in their
deliberations (ibid.).
The proposed absorpti on of the j uni or
soci eti es
Although the Accountancy Advisory Cornmit-
tee rejected the applications of the junior socie-
ties for recognition as qualifying bodies, it
became apparent during 1948 that some of
the i ndi vi dual members “have the qualifica-
tions to warrant recognition under Section
23(l)(a)” (Board of Trade, BT58/574/
COS3409/48). Given the prospect of receiving
numerous applications from individuals and
the fear of being swamped by appeals, the
’ The Association was naturally annoyed at its exclusion from the Accountancy Advisory Committee and sought an
explanation from the Board of Trade. The Secretary of the Association reported in December 1948 that E. H. S. Marker
of the Board of Trade had stated that “membership of the Committee was nothing to do with accountants” and that “it was
purely coincidental that a member of the Institute and a member of the Society were on that committee because they
were there as representatives of non-accounting organisations and not as representatives of the Institute” (ACCA, Minutes,
14.12.48). This disingenuous response elicited no further comment by the ACCA.
* The institutions involved were: The Btitish Association of Accountants and Auditors Ltd., The Association of International
Accountants Ltd, The Faculty of Auditors Ltd, The Society of Commercial Accountants Ltd, and The Association of
Practising and Commercial Accountants Ltd.
484 S. P. WALKER and K. SHACKLETON
Board of Trade considered the prospect of
recognizing a “fourth” body of qualified
accountants in addition to the chartered insti-
tutes, the SIM and the ACCA. The senior offt-
cial in the Insurance and Companies
Department of the Board of Trade suggested
that an additional organization could arise
from an amalgamation of the “better ele-
ments” of the British Association of Accoun-
tants and Auditors, Ltd, the Faculty of
Auditors Ltd and the Association of Intema-
tional Accountants Ltd. However, it was
deemed preferable for the suitably qualified
among these junior societies to be absorbed
by the ACCA (ICARW, Coordination Minute
Book, 1946-1951, p. 25). The Association
referred the absorption proposal to the Co-ordi-
nating Committee (ACCA, Minutes, 14.12.48).
In December 1948 the Committee, unani-
mously resolved to view the proposed absorp-
tion “with disfavour” (ICAEW, Coordination
Minute Book, 1946-1951, p. 26).
As it became clear that the Board of Trade
and the Treasury strongly supported absorp
tion rather than the creation and recognition
of an additional organization of accountants
the initial policy of the Coordinating Commit-
tee was reversed. An ICARW Advisory Commit-
tee on Coordination resolved in February 1949
that “owing mainly to political considerations”
the Council should recommend the absorption
provided that the Board of Trade deny recogni-
tion to any other professional bodies and satis-
factory eligibility criteria be established for the
admission of the “better elements” to the
ACCA (ibid., p. 22). Thereafter, the Co-ordinat-
ing Committee met primarily to discuss absorp-
tion proposals: the numbers involved (about
1500) and the conditions of entry (ICAEW,
Coordination Minute Books, 1946-1951,
1951-1955).
The absorption proposals had important
implications for the Public Accountants’ Bill.
Recognition of a fourth body of accountants
by the Board of Trade would have meant that
the new organization would have to be
included in the Bill. It was also to be suggested
that consideration of the Public Accountants’
Bill was adversely affected and delayed by the
profession’s inconclusive response to the issue
of absorption (ICARW, MS28435/42, Box 4).
The demi se of the “co-ordi nati on”
movement
During 1948 and 1949 the participating
organizations reexamined their policies on leg-
islation for the profession. The passing of the
Companies Act had materially altered the posi-
tion regarding the Public Accountants’ Bill in
two ways. Firstly, the, auditor qualification pro-
visions and the determination of recognized
bodies by the profession itself (via the Accoun-
tancy Advisory Committee) secured a substan-
tial degree of protection which had
underpinned the proposals for registration.
Secondly, the accountants were unsure as to
the extent of the Board of Trade’s support for
the Bill now that the department’s most impor-
tant measure was on the statute book. Other
complications were the pressure on parliamen-
tary time and the Socialist complexion of the
administration. In June 1948 there were sugges-
tions that the advancement of a Public Accoun-
tants’ Bill should “wait for a change of
Government” (ICAEW, Coordination Minue
Book, 1946-1951, p. 16) as advancing legisla-
tion at this time held the “possible danger of an
attempt on the part of the Left Wing elements
of the Government to obtain control of the
whole profession” (ibid., p. 15).
More importantly, following consultations
with other government departments and out-
side bodies, the Board of Trade suggested
changes to the Public Accountants’ Bill in July
1948 which were so fundamental as to effec-
tively initiate a process of retreat by the profes-
sional organizations led by the ICAEW (KAEW,
MS28435/42, Box 3). The term “public accoun-
tant” was objected to, and wider representa-
tion on the Public Accountants’ Councils was
advocated. Further, it was considered that
accountants in the public sector should not
be precluded from practice and the complete
ban on non-licensed accountants from practis
ing was questioned (ibid.). The President of
ICAEW determined that the latter “vitiates the
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 485
whole principle of the BiII” (ibid.) and in
November his Council recognized that the
Companies Act had materially altered the ques
tion and that a BiII would require major revi-
sions to satisfy government (ICAEW, MS2841 l/
14, p. 292). It was resolved to alter the function
of the Coordinating Committee such that it
became an organ for maintaining contact
between the participant Institutions and an
interface between the profession and the
Board of Trade (ICAEW, Coordination Minute
Book, 19461951, pp. 24-25).
In November 1949 the President of the
ICAEW disclosed that his secretariat had never
been at ease with the proposed legislation for
the profession and that the question required
conclusive deliberation (ibid., p. 37). The
views of the district societies of the ICAEW
were elicited and in March 1950 it was
resolved to abandon the 1946 draft of the Pub
Iic Accountants’ BiIl and explore alternative
legislation (ibid., pp. 48-49). By June 1950,
an Accountants’ (Public Practice) Bill had
been prepared though its limited object (to
prevent misdescription by unqualified per-
sons) failed to satisfy the ICAEW. On 12 April
1951 the Council of the ICAEW concluded, by
an overwhelming majority, that the Bill “fails to
serve the purpose for which it was devised
and, in view of the apparently insuperable dif-
ficulties, is of opinion that there is no useful
purpose in continuing negotiations for the co-
ordinating of the profession on these lines”
(Minutes, 1949-1952, p. 272). Six days later,
the Coordinating Committee effectively halted
the crusade to secure registration (ICAEW, Co-
ordination Minute Book, 1946-1951, pp. 99-
106). The ACCA was alone in opposing the
abandonment of the Bill. One of its representa-
tives on the Coordinating Committee angrily
concluded:
Thus after years of careful consideration, of patient and
prudent e xamination we are back to the place from
which we started. It would appear that alI our work
has been badly done - that it has been defective and
thus futile.
In the next few weeks we shall be having our Annual
General Meetings. What are we going to tell our mem-
bers? That of all the great professions ours is the only
one that cannot evohre a scheme of regulation or CCP
ordination - that where architects, dentists, and others
have tried and succeeded, accountants have tried and
failed. That we are unable to meet our own needs or
those of the public (ibid., p. 101).
Following the abandonment of the Accoun-
tants’ (Public Practice) BilI in 1951 the Co-ordi-
nating Committee concentrated its efforts on
the administration and amendment of the audi-
tor qualification provisions of the Companies
Act, 1948 (contained in Section 161) (ibid., p.
106). It was resolved that any application to the
Board of Trade by the Institute of Municipal
Treasurers and Accountants for recognition
should not be opposed and it was proposed
that the auditors of exempt private companies
(mainly family concerns) under the Act should
also be members of one of the recognized bod-
ies (Section 161 did not apply to exempt pri-
vate companies). In January 1952, the Board of
Trade considered that with the advent of the
Conservative Government and given the
“moral obligation” which the Board of Trade
had to the profession following the previous
lengthy discussions, a Bill to amend Section
161 might be favourably received (KAEW,
Coordination Minute Book, 1951-1955, pp.
17-18). However, the latter was to proceed
once the ACCA absorption of c. 900 “better
elements” of the junior societies had been
completed. In May 1955, the Coordinating
Committee held its fmal meeting to hear that
in January the membership of the ACCA had
narrowly rejected the absorption proposals
(ibid., pp. 38-39; also ne Accountant’s Jour-
nal, 1955, p. 53). Although the Faculty of Audi-
tors Ltd and the Anglo Society of Accountants
and Auditors had amalgamated, the Board of
Trade was not to recognize a fourth body.
Thus the genesis of proposals during war-
time and in the period of post-war reconstruc-
tion to secure the registration of the profession
proved unsuccessful. In order to more fully
comprehend the failure of the Coordinating
Committee to secure its essential objective and
the nature of the inst.itutionaI structures which
emanated from its activities, it is necessary to
486 S. P. WALKER and K. SHACKLETON
examine the behaviour and interrelationships of
the principal participants.
THE FAILURE OF THE “CO-ORDINATION”
MOVEMENT
The formation of a peak organization by the
accountancy profession to make unified repre-
sentations to government and to interface with
the centripetal state met with a certain degree
of success. The Coordinating Committee indir-
ectly secured quasi-registration in the realm of
corporate auditing through its interlocking
membership of the Accountancy Advisory
Committee of the Board of Trade. However,
the Coordinating Committee was unable to
achieve registration via licensing bodies akin
to private interest governments. Corporatist
paradigms provide a pertinent framework in
which to analyse the reasons for the failure of
the Coordinating Committee to attain its ulti-
mate objective: a monopoly de J ure of public
accountancy practice.
I nternal and external structures and
rel ati onshi ps
In addition to examining the relationship
between organized interests and the state, cor-
poratist models also encompass the impact of
corporate arrangements on the internal struc-
tures of producer groups and the relationships
between them (Williamson, 1989, ‘p. 75). The
effective representation of collective interests
and participation in policy making and imple-
mentation usually necessitates the creation of a
centralized institution which interacts directly
with government. An additional structure is
thereby added to the functional hierarchy of
institutions which subsequently consists of:
the peak organization (such as the Co-ordinat-
ing Committee); its constituent organizations
(the professional institutes); and the individual
members.
Effective interaction with the state is asso-
ciated with top-led organizational structures,
downward authority flows and a tendency to
leadership determination of constituent inter-
ests. The potential consequences of such insti-
tutional arrangements include the detachment
of the central organization from its constituents
and their memberships and the creation of new
points of institutional conflict (Middlemas,
1980, p. 21). The isolation of the latter groups
is also encouraged by the secretive nature of
negotiations with the state and within the
peak organization which potentially result in
exposure to revolt from below when consent
for decisions is sought (ibid., p. 372). The diffi-
culties faced by the multi-organized accoun-
tancy
profession given the structural
consequences of participation in corporatist
arrangements have been revealed by Cooper
et al . on the issue of inflation accounting
(1989, pp. 256-257, 265-266). Richardson
has also shown that a lack of homogeneity in
professional institutions can introduce an ele-
ment of instability in corporatist relations
(1989, p. 419).
The memberships of the accountancy orga-
nizations generally (with the exception of
ACCA members’ rejection of the absorption
of the better elements of the junior societies
in January 1955) proved accommodating
when called upon to ratify the attempts of
their leaders to reform the profession during
the 1940s and 50s (most notably in June
1946). However, the creation of an additional
representative structure at the apex of the
British accountancy institutions (the Co-ordi-
nating Committee) with which to interface
with government and determine a unified pro-
fessional policy did not rest easily on a founda-
tion of meso-level constituents who were
accustomed to self-interested policy determina-
tion and to periodic displays of inter-organiza-
tional hostility. An additional complication was
that the unique constitutional arrangements of
each organization were not easily accommo-
dated within the top-down pyramidal deci-
sion-making structure required for unified
policy making and for speaking to government
with a single voice.
From the outset, the leadership of the co-
ordination movement and the determination
of policy was dominated by the institutions
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 487
which were popularly perceived as constitut-
ing the guardians of the British profession -
the ICAEW and the SL4A (Z%e Times, 28 May
1941, p. 5). The formulation of policy initia-
tives by the ICAEW-Sk4 axis, their downward
filtration and attempted imposition (via the Co-
ordinating Committee) on the other accoun-
tancy organizations met with considerable
resistance during 1942 to 1946, particularly
from the Scottish CAs and the certified
accountants.
It was stated in 1946 that the Presidents of the
ICAEW and the SIAA had “jointly initiated dis-
cussions” during the Spring of 1942 which had
resulted in the formation of the Coordinating
Committee (n3e Accountant, 1946, p. 178).
The most fervent advocate and leading light
of institutional reform was the President of
the ICAEYV, Charles Palmour, who had
objected to the opposition of the ICAEW to
registration before the Goschen Committee in
1930 (ICAS, 13/3, p. 453). It was to be
suggested that Palmour, who chaired the Co-
ordinating Committee and its subcommittees
until 1945, and maintained close control of
their operations, “was pursuing this subject
hard as a monument to himself” and was
“resolved to carry through what is in his
mind” (ICAS, 121/1/l, dot. 33). He wrote to
Jowitt in October 1942 thus: “As you are prob-
ably aware I am now serving my fifth year as
President of the Institute of Chartered Accoun-
tants and I have very much set my heart on a
real endeavour being made to strengthen our
professional standing” (War Cabinet, CAB 117/
46, fol. 17).
Pahnour’s imposition of strict timetables, the
circumscription of opposition to his proposals,
the covert nature of discussion and the propo-
sals themselves encountered little opposition
from the Councils of the ICAEW (until 1949)
and the SIAA. The translation of such appara-
tus to the Coordinating Committee and the
ICAEW leadership’s determination of constitu-
ent interests was to cause friction with other
accountancy organizations where more com-
plex policy making structures were in place
or were specially instituted to consider the
proposals for the registration of the profession
(see Fig. 1).
The Scottish chartered societies possessed
an additional layer of decision-making machin-
ery which proved an impediment to the effi-
cient operation of downward authority flows
from the Coordinating Committee. In the
ICAEW and SIAA internal decision making on
the proposed legislation for the profession was
reposed in the respective councils. By contrast
the Scottish societies maintained a Joint
Committee and convened the Emergency Sub
Committee of the Joint Committee to discuss
“coordination”. However, executive powers
were vested in the Councils of the local insti-
tutes in Edinburgh, Glasgow and Aberdeen.
This constitutional arrangement proved cum-
bersome, resulted in delayed responses from
Scotland to ICAEW-SIAA proposals and was
aggravated by the difficulties of rail travel
within Scotland and between Scotland and
London during the war. Hence, the President
of the Institute of Accountants and Actuaries in
Glasgow was to complain that “this whole mat-
ter is being rushed. What is the cause of this
urgency? ” (ICAS, 121/1/l, dot. 27). Palmour
claimed that he could never obtain clear policy
directions from the Scottish societies (ibid.,
dot. 33). The Chairman of the Coordinating
Committee appears to have paid little attention
to the logistical and political difficulties of fully
integrating Scottish representatives in the
policy making process.
Whereas the Scats aversion to the top-led
determination of professional policy was
rooted in a long history of adverse reactions
to proposals from south of the border
(Walker, 1995) and was aggravated by their
complex constitutional arrangements, the
apprehension of the ACCA (the “junior
society”) was rooted in a history of hostility
between its predecessor bodies and the senior
societies (Walker, 1991; Shackleton, 1995).
Although enthusiastic about plans for the
reform of the institutions of the profession,
the response of the ACCA to the launch of
the coordination movement in July 1942
was to establish a powerful additional layer
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CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 439
of decision-making machinery - the Policy
Committee - which formed a barrier
between the downward authority flow from
the Coordinating Committee to the ACCA
Council (ACCA, Minutes, 27.7.42).
The Policy Committee of the ACCA was
remitted “to consider questions relating to pol-
icy and planning in the future, including the
question of the coordination and organization
of the profession” (ibid.). Following its forma-
tion, the Policy Committee closely scrutinized
proposals emanating from the Coordinating
Committee, provided policy advice to the
ACCA representatives and its critical reports
were submitted to the Coordinating Commit-
tee itself (much to the distate of Palmour)
(ICAS, 121/1/l, dot. 16). As the negotiations
on registration proceeded the ACCA consid-
ered that its views were not being given full
recognition, that decisions were made which
consistently placed it at a disadvantage to the
“permanent dominant majority” (ICAS, 121/l/
1, dot. 44) of chartered-incorporated interests
and that it was often excluded from informal
negotiations (ACCA, Minutes, 17.12.46). By
May 1944 Palmour was dismayed at the “inde-
finite attitude adopted by the Association and
the unfortunate growing feeling of the impos-
sibility of working harmoniously with them”
(ICAEW, MS28435/42, Box 1).
Coherence of the producer group
Middlemas has stated that “the governing
institutions are not equal in their relative
power or capacity to influence the tinal orien-
tation of the state” (1986, p. 10) and among the
factors which affect their admission to the
realms of central government is the coherence
of their memberships. Interest representation
is more effective when advanced on the basis
of unity and solidarity among the constituents
of the producer group (Beer, 1965, p. 332).
Group power is mobilized when divisive ideol-
ogies previously adhered to by members within
the interest category are devalued and organi-
zational conflicts are replaced by collective
cooperation in order to achieve commonly
desired goals. The essential impediment to
the attainment of the objectives of the Co-ordi-
nating Committee was that the “coordination”
of the profession did not emerge from a con-
sensual recognition among all the accountancy
bodies for registration. The top-led determina-
tion of constituent interests served largely to irri-
tate traditional sensibilities of the accountancy
organizations and tended to the reinforcement
of their particularist ideologies.
The leading advocates of the “coordination”
of the profession recognized the importance of
unanimity from the outset. In October 1942
Palmour stated that “without wholehearted
cooperation among the leading members of
the Profession any scheme will stand small
chance of success” (War Cabinet, CAB 117/
46, fol. 17) and later guarded against the con-
stituent organizations being “too dogmatic”
(ICAEW, MS28435/42, Box 1). The ministers
and senior civil servants who considered the
Public Accountants’ Biil stressed that any mea-
sure would have to be unopposed and non-
contentious (ibid., Box 2). Despite such calls
for the subjugation of partisan tendencies
among the accountancy organizations in order
to achieve the registration of the profession,
traditional hostilities proved too entrenched
even in wartime.
From first receiving intimation in 1942 that
moves were afoot to consider the organization
of the profession, the traditional sensibilities of
Scottish chartered accountants concerning
their position in relation to the English profes-
sion and the history of altercation with the
antecedents of the SIAA and ACCA were
aroused. Proposals for a single Public Accoun-
tants’ Council for the U.K. were perceived as a
danger to the independence of the Scottish
societies - “the thin end of the wedge of giv-
ing away our birthright” (ICAS, 121/1/l, dot.
32) and offered the prospect of “Scotland
becoming subservient to the ICAEW” (ibid.,
dot. 26). Senior office bearers of the Scottish
societies also disapproved of the level of repre-
sentation offered to the ACCA on the proposed
Public Accountants’ Council which was dispro
portionate for a body “which has so little real
qualification as accountants” (ibid.). Other
490 S. P. WALKER and K. SHACKLETON
office bearers in Scotland were outraged by the
proposed unitary credential of “public accoun-
tant” which would imply an equality of status
among certified, Incorporated and chartered
accountants (ICAS, 121/1/l/, dot. 18). The
determination of the Scottish chartered socie-
ties to protect their interests was given official
support by the intervention of the Secretary of
State for Scotland who urged them to “hold out
for separate Scottish machinery of recognition”
under the proposed scheme (Scottish Home
and Health Department, HH1/594 13.11.42)
and “to keep the Scottish point of view well
to the fore” (ibid., 17.5.44).
From the first meeting of its Policy Commit-
tee in October 1942, the ACCA also adopted a
defensive stance to the formation of the Co-
ordinating Committee in anticipation of the
resurrection of old animosities. It was deter-
mined that the ACCA representatives on the
Coordinating Committee “should be given
full authority to take, as occasion arise, any
necessary or expedient action with regard to
anything savouring of non-cooperation or pre-
ferment of sectional interests” (ACCA, Minutes,
27.10.42). When the proposed composition of
the Public Accountants’ Council was revealed
together with the intention to institute a sepa-
rate Public Accountant’s Council for Scotland
ACCA fears were aroused. In May 1943 the
Policy Committee reported that the scheme
reflected “the existence of conflicting inter-
ests, traditional tendencies and partisan sus-
ceptibilities” (ICAS, 121/1/l, dot. 16). The
Scats in particular were considered to place
the protection of their independence above
measures to advance the regulation of the
profession (ACCA, Minutes, 6.11.44). The certi-
fied accountants were constantly suspicious of
the formation of sectional groupings which
threatened its negotiating position.
Further, the ACCA considered that the
proposals emanating from the Coordinating
Committee were at variance with the wartime
spirit of cooperation which had induced the
movement to reform the organization of the
profession:
They provide for a voluntary and hand picked body
constituted in such a manner as will give a permanent
dominant &jority wide and dictatorial powers over a
minority with whom their intersts clash at several mate-
rial points and to whom for many years they have
shown antipathetic tendencies (ICAS, 121/1/l, dot. 16).
Although by 1946, a certain accord had bro-
ken out among the constituent organizations
represented on the Coordinating Committee,
the fundamental and protracted disagreements
between the Scottish chartered accountants
and the certified accountants together with
their common suspicion of the motives behind
the proposals for registration were important
reasons why much of the impetus behind the
early co-ordination movement was lost. By the
time that fundamental disagreements within
the Coordinating Committee had been
resolved, the political climate was radically
altered and regulation of the profession had
become embroiled in companies legislation.
The rhetoric of national interest
The recognition and incorporation of inter-
est associations into the machinery of the cor-
poratist state is dependent upon group
adherence to a consensual view of the national
interest. Middlemas has stated that “those who
aspire to and are able to compete at the
‘altruistic’ level of the national interest enter
the environs of the state” (1986, p. 10). Those
who appear not to be motivated by altruism are
treated as mere interest groups as opposed to
potential governing institutions. Particularly
during the Second World War it was impera-
tive that “at a time of national struggle and
individual self-sacriIice, self-interest had to veil
itself decently in a cloak of legitimacy by claim-
ing to be one aspect of the national Interest”
(ibid., p. 47). Participation in government
implies avoiding the pursuit of explicitly parti-
cularistic demands and adherence to long-term
altruistic objectives (Williamson, 1989, p. 216).
At an early stage the leading figures on tbe
Co-ordinating Committee recognized that legis-
lation for the profession had to be advocated as
being in the public interest (ICAEW, MS28428,
p. 8). Similarly, in their communications with
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 491
ministers and senior civil servants, Palmour and
his colleagues cursorily mentioned that their
proposals were altruistically motivated. In
May 1943, for example, Palmour urged the
Board of Trade to deal with the question of
the accountancy profession speedily “in order
that the public may be protected against such
Intrusion into the work of the profession as
took place after the last war, when large sums
of money were paid to so-called Excess Profits
Duty Recovery Experts calling themselves
accountants” (War Cabinet, CAB 117/46, f.
39a). Similarly, when the Public Accountants’
Bill was presented to the Board of Trade for
consideration in 1947 it was propounded as
“a measure which wiIl be acceptable to H.M.
Government as being in the best interests of
both the public and the profession” (KAEW,
MS28435/42, Box 2).
The transparency of the altruistic veneer was
easily penetrated by Ministers. Dalton, the
President of the Board of Trade, instantly recog-
nized the particularistic nature of the accoun-
tants’ proposals as “a move towards a ‘closed
shop’ in this profession” (War Cabinet, CAB
117/46, f. 44) and was against government con-
sideration of so contentious a measure in 1943.
The covert negotiations which were con-
ducted within the profession made no secret
of the self-interested objectives of the Co-ordi-
nating Committee’s proposals. In August 1942
the stated object of the Committee was “to
consider coordination of the profession in
approaching Government Departments and
the further question of possible restriction of
persons holding themselves out as practising
accountants and other subjects affecting the
welfare of the profession” (ICAEW, MS28428
p. 1). The former object was expeditiously rele-
gated. By October 1942 the function of the sub
committee of the Coordinating Committee was
stated as being to consider proposals “with a
view to making the practice of public accoun-
tancy a closed profession” (ibid., p. 3). By Feb-
ruary 1943 Scottish representatives recognized
that “it now appears that the principal object
of the scheme is the registration of accoun-
tants” (ICAS, 121/1/l, dot. 25). It was only
when the veil of secrecy was lifted on the Pub-
lic Accountants’ Bill in 1946 that the Co-ordi-
nating Committee gave some thought to the
desirability of “emphasising the necessity for
the Bill in the public interest” (ICAEW,
MS28428, p. 92).
The protectionist objects of the Public
Accountants’ Bill - to close the profession to
an expected flood of usurpers on demobiliza-
tion - were strongly advocated whenever the
proposed scheme encountered difficulty from
a recalcitrant organizational constituent. For
example, in December 1943 Palmour informed
the President of the Society of Accountants in
Edinburgh that:
I am strongly of the opinion that we should endeavour
to get the biII through before the war is over. I feel sure
that we shall have a repetition of what happened after
the last war in the way of taxation experts and more-
over there wilI be numerous men coming out of
Government service who have been employed as Cost
Accountants in the Board of Trade, Ministry of Supply
and the Ministry of Aircraft Production, some of whom
wilI endeavour to start practice on their own (KAEW,
MS28435/42, Box 1).
The particularist motives were not modified
after the Second World War. In November
1949 the President of the ICAEW composed a
list of the advantages of the legislation which
was proposed for the profession. At its head
was “The closing of the door to the formation
of other public accountancy bodies” (ibid.,
Box 4).
The sceptics on the Coordinating Commit-
tee were among the first to recognize the
potential futility of advocating registration for
the profession as in the interests of the wider
community during periods of wartime patrio-
tism, national emergency and post-war consen-
sus politics. In January 1944 the President of
the Edinburgh Society informed Palmour that
“the fact is that the Scheme is an attempt by
the Profession to close it, and it will be judged
in that light by Parliament and the general pub
lit” (ibid., Box 1). By April 1951 the ICAEW
finally comprehended that there was no “real
demand from the public” for protection from
492 S. P. WALKER and K. SHACKLETON
unqualified accountants (ICAEW, Coordination ment would not adopt the Public Accountants’
Minute Book, 1946-1951, p. 98). Bill as a public measure.
All i ncl usi ve parti ci pati on
Claims that corporatist arrangements are in
the national interest are also legitimized by the
inclusion of the principal representative groups
in the lobbying and co-operative process. The
effective advocacy of group interests requires
corporate representation. If producer groups
are to influence government then the interest
must be comprehensively organized (Beer,
1965, p. 331). Enhanced power and influence
accrues to those peak organizations which can
claim to represent a high “density” of the
eligible constituents in their functional domain
(ibid., p. 332). Further, if the state is to utilize
group
institutions for implementational
functions then it is imperative that the associa-
tion “covers most, if not all, those producers
which are the target for the intervention”
(Williamson, 1989, p. 110).
Among those groups who were invited to
participate on the Coordinating Committee,
one set of organizations in particular were
reluctant to take part. From the outset the
Scottish societies adopted a detached ambiva-
lence to the attempt to address the organiza-
tion of the profession. They were never
convinced of the need to seek registration
during a period of national emergency and
deprecated the speed with which the propo-
sals were discussed. The Scottish representa-
tive at the first meetings of the Coordinating
Committee in 1942 attended as an observer and
was expressly instructed not to commit the
societies to policy initiatives (ICAS, 121/1/l,
dot. 32). The participation of the Scottish
societies in the later negotiations was moti-
vated by defensive reasons and for fear of
being sidelined or otherwise forced to partici-
pate by the Government (ibid., dot. 28).
Previous attempts to regulate the profession
had failed due to an inability to achieve unani-
mity behind any one set of proposals
(Macdonald, 1985). The senior office bearers
of the ICAEW and SIAA were therefore anxious
to obtain the cooperation of all the principal
U.K. organizations in the formation of the
representative Coordinating Committee and
in the determination and implementation of
the legislation for the profession. For Jowitt,
the minister responsible for reconstruction,
the concept of all inclusivity was an essential
tenet of post-war planning. It was important
that “as far as possible to neglect no expres-
sion of responsible and Informed opinion
which can help in forming plans for the future
based on experience of realities and expressive
of the united national will’ (War Cabinet, CAB
87/l, Memorandum No. 2, 27.2.41). In June
1944 Jowitt warned the accountants that
“only with full agreement between the various
bodies would there be the slightest chance of
securing the legislation desired” (Scottish
Home and Health Department, HH1/594,
20.6.1944) as without unanimity the Govem-
On two occasions the Chairman of the Co-
ordinating Committee was compelled to visit
Edinburgh to “beard the lion in its den” (War
Cabinet, CAB 117/46, f. 32). In March 1943
Pahuour persuaded the Scats to remain in the
scheme by conceding the formation of a sepa-
rate Public Accountants’ Council for Scotland.
In December 1945 Sir Harold Howitt (who had
succeeded Palmour as the President of ICAEW
and ex officio Chairman of the Coordination
Committee in the summer of 1945) attempted
to resolve fundamental differences between
the Scottish chartered societies and the ACCA
concerning the period of training required for
admission to the proposed register of public
accountants. On his return, Howitt reported
that the Scats would be content if the propo-
sals were completely dropped and gave some
thought to the option of limiting the Bill to
England and Wales, as, “having regard to their
numbers, the Scotchmen are being completely
unreasonable” (ICAEW, MS28435/42, Box 1).
The dispute over the period of training was
resolved in 1946. The Scottish societies played
no significant part in the subsequent delibera-
tions concerning the fundamental problems
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 493
with the Public Accountants’ Bill. When the
decision was announced by the ICAEW to with-
draw legislation for the profession in April
1951, the Councils of the Scottish societies
were happy to accede.
In dete rmining which of the mainstream
accountancy organizations to include in its
deliberations, the question of representation
on the proposed Public Accountants’ Council
and the conferment of the status of qualifying
body under the scheme, the Coordinating Com-
mittee was much occupied with constitutional
difficulties surrounding the participation of the
Irish Institute. The essential problem was that
any legislation emanating from the British
Parliament had no relevance in Eire and
although the ICAI had an office in Belfast, it
was primarily a Dublin-based organization. It
was not until July 1943 that a representative
of the ICAl was admitted to membership of
the Coordinating Committee. However, when
the Public Accountants’ Bill was printed in April
1946 the ICAI was not included as a “qualifying
body”. In April 1947, the representative of the
Irish Institute on the Coordinating Committee
stated “that the ICAI would oppose the Bill in
every possible manner” unless qualifying body
status was conferred on his Institute (ICAEW,
Coordination Minute Book, 1946-1951, p.
12). By July 1948, on the determination that
its establishment in Northern Ireland ensured
that it was within the domain of U.K. legisla-
tion, the ICAI had achieved its objective and
was also to secure recognition from the Accoun-
tancy Advisory Committee for the purposes of
the audit provisions of the Companies Act, 1947
(ibid., p. 18).
In addition to the difficulties relating to the
participation of the principal accountancy
organizations in the framing and implementa-
tion of the proposals to regulate the profes-
sion, the Coordinating Committee was
confronted with the considerable problem of
defining which of the multifarious organiza-
tions of accountants outside of the mainstream
institutions to exclude from its deliberations
and designs. Given that the object of the Com-
mittee was to formulate proposals to secure
closure via the registration of publ i c accoun-
tants, those organizations whose members
were outside public practice or were consid-
ered undeserving of the credential were
excluded from negotiations and the provisions
of the proposed legislation. All inclusivity was
inherently unattainable given the essential
objectives of the Public Accountants’ Bill.
From a relatively early stage ministers
received complaints from those groups who
were excluded from the secret negotiations
being conducted between the Coordinating
Committee and government on the future of
the accountancy profession. In May 1943 the
Association of International Accountants
asserted that all organizations of accountants
were entitled to be consulted and deprecated
the prospect of those institutions outwith the
mainstream profession being presented with a
fai t accompl i without “having had the slightest
knowledge of what has been going on” (War
Cabinet, CAB 117/46, fol. 55).
Similarly, in November 1944 the Coordinating
Committee determined not to consult the Insti-
tute of Cost and Works Accountants (ICWA) and
the Institute of Municipal Treasurers and
Accountants (IMTA) until the proposals were
finalized (ICAEW, MS28428, pp. 57-58). Follow-
ing the entry of the Public Accountants’ Bill to
the public domain in 1946, the ICWA com-
plained that the non-inclusion of its members
as “public accountants” was prejudicial to cost
accountants. The IMTA also expressed discon-
tent over the exclusion of its members who con-
sidered themselves as accountants in public
service and argued that the proposed legislation
be extended to cover “the whole of the accoun-
tancy profession” (ICAEW, Coordination Minute
Book, 1946-1951, p. 78).
The Board of Trade and the Coordinating
Committee received objections to the Public
Accountants’ Bill and its successor from other
organizations of accountants, government
departments and trade unions such as the
National Association of Local Government Offi-
cers (NALGO). The General Secretary of
NALGO asserted that his union’s “member-
ship includes qualified and unqualified persons
494 S. P. WALKER and K. SHACKLETON
employed in accountancy work by local
authorities and statutory undertakers . . . who
might properly claim to be true public account-
ants” (BT58/574/COS3409/1948, 27.1.48). Such
groups complained that they were not privy to
the genesis of the proposals and would be dis-
advantaged by their implementation. The Co-
ordinating Committee was urged by the Board
of Trade to meet representatives of the outside
bodies (ICAEW, MS28428 pp. 96-97) in order to
achieve a Bill acceptable to all parties. The con-
sequences of the late attempts of the Co-ordinat-
ing Committee to respond to the need for all
inclusivity were the increasing dilution of the
original proposals (which ultimately proved
unsatisfactory to the Coordinating Committee)
and the protraction of the discussions.
The primacy of the state
Although corporatists recognize the depen-
dency of the government on producer groups
due to their potential informational and lmple-
mentational functions, it is the state which
determines the timing of the institution of cor-
poratist relations and the nature of the interac-
tion (Middlemas, 1986, p. 10). In short, the
state occupies a position of “relative auton-
omy” (Williamson, 1989, pp. 29-32), it “has
the freedom to pursue particular strategies in
line with its own institutional interests” (ibid.,
p. 129) and has the resources to ensure that
these prevail. Also of significance in the power
relations between the state and the producer
group is the concept of reciprocity whereby
corporatist arrangements are instituted on the
basis of mutual advantage and consent.5 Gov-
ernments are more receptive to the demands of
producer groups when their implementation
has beneficial consequences for the state.
referred to the utility of the accountancy orga-
nizations making representations as a func-
tional whole, successive governments during
the 1940s and 50s did not call for registration.
The impetus behind the latter came from the
ICAEW-SIAA axis. The meeting of representa-
tives of the ICARW with the Minister responsi-
ble for reconstruction in July 1942, which
marked the beginning of state interest ln the
structure of the profession, had been insti-
gated by the London Members Committee of
the ICARW, not by the Government. Treasury
officials were averse to attending a meeting
with accountants and the Reconstruction
Secretariat were “not anxious to put any pro-
posals or task before them and only proposed
to hear what they had to say” (War Cabinet,
CAB 117/46, f. 7). When the minister respon-
sible for reconstruction problems met the
ICARW representatives in September 1942 to
discuss post-war cost accounting he indepen-
dently “raised the question of collaboration
within the profession” (ibid., f. 16) and wel-
comed attempts to establish a high standard
of qualification for accountants. This was taken
by the President of the ICAEW as an opportu-
nity to formulate proposals for registration.
Although the state had instituted corporatist
relations with the accountancy profession dur-
ing the early years of the war in relation to
accounting manpower and the provision of
expert knowledge and some ministers had
The disinterest of the government in initia-
tives for the closure of the accountancy profes-
sion by legislation is revealed by the fact that
proposals for institutional reform did not ema-
nate from the relevant ministry - the Board of
Trade - and by the negative reaction of that
Department to the registraton proposals which
were presented to it during the spring of 1943.
The Board “were far from being convinced of
the desirability of the organisation of the pro-
fession on the basis contemplated” (Scottish
Home and Health Department, HH1/594,
20.6.44).
The success of the Public Accountants’ BiIl
depended on it being adopted as a government
measure sponsored by the Board of Trade
(ICARW, MS28435/42, Box 1). However, the
e
’ In accounting regulation for example, Cooper et al. show how the profession was granted privileges in return for the
application of policies advantageous to the state (1989, p. 252).
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION
495
Board of Trade under both the wartime CoaIi-
tion and post-war Labour Governments had an
alternative agenda of more compelling issues,
in particular the reform of company law (see
Bircher, 1988, pp. 116-119). The creation of
Public Accountants’ Councils and registration
of the accountancy profession was low on the
list of legislative priorities. Once an agreed Pub
lit Accountants’ Bill was presented to the
Board of Trade in June 1947 the accountants
were informed that the matter would not be
treated as urgent and that it might take three
years for the Bill to reach the Statute Book
(ICAEW, Coordination Minute Book, 1946-
1951, p. 10; MS28435/42, Box 2). The Presi-
dent of the ICAEW later commented that
although “the draft Bill was sympathetically
received by the Board of Trade . . . its progress
was inevitably delayed by various considera-
tions and in particular by the extensive legisla-
tive programme of the Government” (ibid., p.
94).
The proposals contained in the Public
Accountants’ Bill did not offer sufficient reci-
procal benefits to the state, particularly in the
context of the more urgent legislative priorities
of the post-war Labour Government. The Board
of Trade was most amenable to the participa-
tion of accountants in policy determination and
implementation when it recognized that they
would prove useful in the execution of its
own programme. Hence, when it was realized
in 1947 that the interpretation and implementa-
tion of the accounting provisions of the Com-
panies Act would require consultation with
those reposed of the requisite technical exper-
tise the Coordinating Committee was enlisted
by the Board of Trade as a ready made specia-
list forum (Board of Trade, BT58/446/7450).
The Board of Trade also utilized its power in
relation to the Public Accountants’ BiII by
imposing its own demands as a condition of
its success. During the late 1940s and early
1950s government support for the regulation
of the profession was essentially made condi-
tional on the successful absorption of the lesser
accounting organizations to avert the creation
of a “fourth body” of practitioners (ICAEW, Co-
ordination Minutes, 1946-1951, p. 22).
The rol e of the bureaucracy
Corporatist writers increasingly recognize
the role of the bureaucracy at the interface of
state/producer group relations and the poten-
tial significance of conflicts between compet-
ing interests within bureaucratic structures
for the advancement of group demands and
the operation of corporatist intermediation
(Williamson, 1989, pp. 180-182). Although
senior departmental civil servants assume
brokerage and organizational roles in inter-
mediary relationships, bureaucrats also consti-
tute groups within the state which are not
averse to the protection of their own interests
and functional domains (ibid.; Middlemas,
1986, p. 6). Middlemas has also drawn atten-
tion to the role of the “mandarin elite of the
civil service” (p. 9) in the development and
transmission of corporatist ideologies such as
conflict avoidance and the primacy of the
national interest over the demands of particu-
lar interest groups (pp. 9-10).
The documentary evidence suggests that the
Coordinating Committee seriously underesti-
mated the power of the senior civil servants
who monitored and scrutinized their propo-
sals. Bureaucratic aversion to contentious mea-
sures during a period of consensual politics and
the extent to which departmental officials
sought modifications to the Public Accoun-
tants’ Bill for reasons of self interest surprised
the accountants. Bureaucratic mediation
resulted in the framing of bills for the pro-
fession which contained measures which
were so diluted as to prove unpalatable to the
Coordinating Committee.
From April 1943 onwards the official who
dealt with the question of the organization of
the accountancy profession was E. H. S. Mar-
ker, Principal Assistant Secretary of the Insur-
ance and Companies Department of the Board
of Trade (see who’s IVbo, 1956, p. 1971). As
registration of the profession had not emanated
from the Board as a matter of public policy,
ministerial Involvement in the scrutiny of the
496 S. P. WALKER and K. SHACKLETON
proposals was minimal. The success of the
proposals depended heavily on Marker’s dispo-
sition and until he recognized that the Co-ordi-
nating Committee would prove useful for his
Department’s purposes in the implementation
of the Companies Act in 1947, he was decid-
edly unenthusiastic. In June 1943, for example,
Palmour complained to Jowitt that “my meet-
ing with Mr Marker of the Board of Trade and
his attitude on the whole question have tilled
my colleagues and myself with nothing but pes-
simism, and his criticism seems to be of an
entirely destructive character” (War Cabinet,
CAB 117/46, f. 46). It was later complained
that Marker was peevish, uncompromising
and procrastinating (ibid., f. 52).
From the presentation of the Public Accoun-
tants’ Bill to the Board of Trade in 1947 and the
establishment of the Accountancy Advisory
Committee, Marker entered into a more parti-
cipative relationship with the Coordinating
Committee. In addition to holding frequent dis
cussions with delegations from the Committee
he was invited to some of its meetings and his
advice on the content and progress of legisla-
tion for the profession was invariably heeded.
The difficulties which beset the Public Accoun-
tants’ Bill after 1946 resulted in radical redraft-
ing and retreat from the original registration
proposals in order that Marker’s own sugges-
tion of a profession based on “the doctors
model” (ICAEW, Coordination Minutes,
1946-1951, p. 40) might form the foundation
of legislation.
As part of the process of consultation, the
Public Accountants’ Bill was also circulated to
interested government departments outside
the Board of Trade. The principal objections
from other ministries were that the Bill inter-
fered with the career intentions of retired civil
servants and inspectors of taxes (who might
wish to practise accountancy) and the exclu-
sion of accountants in government and quasi-
government service from the definition of
“public accountant”. The Comptroller and
Auditor General, for example, complained in
April 1948 that on the completion of their train-
ing the accountants in his department were as
qualified as professional men (ICAEW,
MS28435/42, Box 4). Despite an initial resis
tance, the Coordinating Committee conceded
to the inclusion in its later proposals of accoun-
tants with experience in government depart-
ments and local authorities with the
consequence that the Bill became little more
than an attempt to prevent misdescription.
During the autumn of 1949 the issue of
organizational reform of the accountancy pro-
fession was considered to be at a crossroads -
the position had been altered by among other
factors, “the attitude of the Civil Service
toward the Bill” (ibid.). The Council of the
ICAEW was urged to provide guidance to its
representatives on the Coordinating Commit-
tee on future policy “in view of possible pres-
sure from certain sections of the Civil Service
and other sources for further dilution of the
ban on practice” (ICAEW, Co-ordination
Minute book, 1946-1951, p. 38).
CO-ORDINATION AND STRUCTURAL
CHANGE
Although the Coordinating Committee failed
to secure the registration of the profession its
activities did result in the emergence of sub-
stantial institutional changes. Two sets of amal-
gamations - the formation of ICAS in 1951 and
the chartered-SW% mergers of 1957 - were
founded on traditional allegiances which had
been fortified as a consequence of the co-ordi-
nation movement.
The uni_fication of the Scottish profession,
1943- 1951
Previous attempts to merge the Edinburgh,
Glasgow and Aberdeen societies had proved
fruitless primarily because of resistance from
the members of the Society of Accountants in
Edinburgh (Shackleton, 1995). The wartime co-
ordination episode, however, revealed that the
local organization of the Scottish profession
was outmoded and cumbersome. The deci-
sion-making process comprising three power-
ful councils and a Joint Committee of
CHANGE IN THE BRITISH ACCOUNTANCY PROFESSION 497
Councils prevented swift and concerted action
and reaction.
In December 1943 the Council of the
Glasgow Institute (IAAG) had adopted a resolu-
tion which advocated the amalgamation of the
three Scottish societies (ICAS, 130/12, p. 48).
No further action was taken until November
1945 when a number of Glasgow members
prepared a resolution to appoint a full-time
secretary of their Institute. The Council of
the IAAG considered that this proposal consti-
tuted a major impediment to the amalgama-
tion of the Scottish societies and persuaded
the requisitionists to withdraw their motion
(ibid., pp. 248-249). However, Sir David
Allen Hay, the President of the IAAG, sug-
gested at the December meeting of the Joint
Committee that the agenda of the next meet-
ing should include a motion that the three
societies should merge. At the Joint Commit-
tee of Councils meeting of January 1946 Sir
David Allen Hay stated that “he had been
impressed as a member of the Coordination
subcommittee by the expeditious manner in
which the Council of the ICAEW came to
decisions as compared with the Scottish pro-
cedure” WAS, 13/4, pp. 556-557). A sub-
committee of the Joint Committee of Councils
was appointed to investigate the possibility of
amalgamation and the concept of merger was
later agreed by the councils of the Edinburgh,
Glasgow and Aberdeen societies (ibid., p.
619).
Subsequent complications relating to the
location of a Scottish institute, the status of
the existing royal charters and the Edinburgh
society’s Endowment and Annuity Fund
delayed the amalgamation (see ICAS, 13/4 and
13/5). However, by November 1950 the propo-
sals for the formation of ICAS had been agreed
by the memberships of the three local insti-
tutes. Sir David Allen Hay considered that the
merger would “enable the Scottish Chartered
Accountants as a unified body, to take a more
effective place in their association with the
other bodies of organised Accountants in Great
Britain than has been possible hitherto” (Z%e
Accountant’s Magazi ne, 1950, p. 352; also
ICAS, 1954, p. 75).
“A momentous scheme” - the chartered-
i ncorporated merger, 195 7
The integration of 10,540 members of the
Society of Incorporated Accountants into the
English, Scottish and Irish chartered institutes
is often perceived as a response to develop
ments in the years immediately preceding
1957. Emphasis has been placed particularly
on the impact of changes in the labour market
for accountancy services in the post-war
economy (Willmott, 1986, pp. 568-569). By
contrast, the primary sources reveal that the
integration of 1957 was a product of the
debate on the future of the profession during
the 1940s and was a political expedient for the
chartered institutes. As the historian of the ICAI
has recognized, it was the Coordinating Com-
mittee which “brought together the leaders of
the Institutes of Chartered Accountants and of
the Society of Incorporated Accountants and
Auditors and led to conversations which
ultimately produced integration” (Robinson,
1964, pp. 279-280).
The scheme of integration was publicly advo-
cated by the institutions involved as an attempt
to unify the profession, reduce public confu-
sion concerning the multiplicity of competing
organizations and enable the advancement of
the interests of the profession with greater
authority (see The Accountant, 1956, 1957).
The Companies Department of the Board of
Trade also perceived the utility of the conse-
quential creation of a two-tier profession
(chartered accountants and certified accoun-
tants) from the perspective of the general pub
lit, British departments of state and foreign
governments (Board of Trade, BT58/631/
COS3149, 13.11.56). A Board of Trade briefmg
note suggested that the result of the integration
“would be that the new Chartered Institute
will in future embrace accountants in practice
and the topflight accountants in the industrial
and commercial world, while the Certified will
cater for the accountants and auditors of the
smaller family businesses” (ibid.).
498 S. P. WALKER and K. SHACKLETON
The potentiality of a merger between the
ICAEW and the SIAA had been mooted on
several occasions before the formation of the
Coordinating Committee in 1942. In 1930, for
example, the issue was discussed at the annual
meeting of the ICABW but “was not favourably
received by the members generally” (ICAEW,
13-1-2(a), 1.11.35). Similarly, integration was
suggested by Stephen Killick (an Honorary
Member of the SIAA and the Lord Mayor of
London), in September 1935 but the President
of the ICABW (Plender) considered that his
Council would be averse to merger and that
“the time has long past when such a proposal
might have proved acceptable” (ibid.).
Such attitudes underwent radical revision
during the Second World War. As the registra-
tion proposals encountered opposition and the
prospect of the success of the Public Accoun-
tants’ Bill became more distant, the possibility
of a closer relationship between the ICABW
and the SIAA was increasingly perceived as an
alternative. In May 1944 it was reported that in
his annual address, the President of the ICABW
(Palmour) stated that if agreement could not be
reached on co-ordination he envisaged “the
formation of a joint committee by the Institute
of Chartered Accountants and the Society of
Incorporated Accountants and Auditors to
ensure that at any rate the two senior English
bodies can speak with one voice” (ICAEW,
MS28435/42, Box 1). The President of the
SIAA concurred that if the work of the Co-ordi-
nating Committee proved fruitless then his
Council would “embark on a partial and volun-
tary scheme with the Institute, whose views in
all matters correspond to those of the Society”
(Zbe Accountant, June 1944, p. 170).
During the late 1940s the lack of progress of
legislation for the profession resulted in the
ICABW questioning the wisdom of proceeding
further and induced a reexamination of alter-
native institutional arrangements with the
SIAA. In November 1949 the President of the
ICABW anticipated that “the absorption by the
Institute of the Society (except Municipal
Treasurers) might dispose of the necessity to
consider any larger measure of coordination”
(ICABVV, MS28435/42, Box 4). At a meeting of
the ICAEW Advisory Committee on Co-ordlna-
tion in March 1950 it was noted that “the dlffl-
culty of stating convincing arguments ln favour
of a merger was appreciated but the views of
the majority of the committee appeared to be
in favour of some form of merger” (ICABW, Co-
ordination Minute Book 1946-1951, p. 50).
However, the Council of the ICABW deter-
mined in March 1950 that it was impracticable
to continue conversations with the SIAA while
legislation for the profession was still under
consideration (KAEW, Minutes of Council,
1949-1952, pp. 92-93).
Active consideration of mergers resumed in
August 1954 when a memorandum was pre-
pared for the President and Council of the
ICAEW on the subject of the Institute’s future
relationship with ICAS and the SL4A. Hints had
been dropped at the centenary celebrations of
the Scottish societies in June 1954 that a closer
relationship between the ICABW and ICAS
should subsist (ICABW, 13-l-2). Although an
amalgamation with the Scottish Institute was
perceived as an ultimate objective of the
ICABW the time was considered inappropri-
ate. A union of the British chartered profession
would ensure that the SL4A would “be thrown
into the arms of the Association” (ibid.). Such a
“leftward” shift and the formation of a large
unified second tier with the potential power
to carry a registration bill outwith the control
of the ICAEW was perceived as potentially dis-
astrous (ibid.). The absorption of the SL4A was
therefore given priority over an amalgamation
with Scotland by the ICABW.
During the autumn of 1954 informal discus-
sions took place between the Presidents of the
ICXBW and the SIAA from which were gener-
ated the merger proposals. On learning of the
proposed integration the President of ICAS
advocated a merger with the SIAA on a federal
basis to incorporate his institute and the ICAI in
the scheme. He concurred that the alternative
prospect of an SIAA-ACCA amalgamation
should be averted for fear of the creation of a
body dangerous to the chartered profession
and considered that absorption of the SIM
CHANGE IN THE BRITISH ACCOUNTANCY’ PROFESSION 499
“would not prejudice in any way the possibility
of the formation of an Institute of Chartered
Accountants of Great Britain in the years to
come” (ibid.). The integration on a federal
basis was to come into force in November
1957 and in January 1958 the Council of the
SIAA met for the last time (Garrett, 1961, p.
330).
CONCLUSIONS
During the inter-war period the accountancy
profession in Britain comprised an expanding
set of multifarious and competing organizations
of differential status. As governments became
increasingly interventionist, particularly during
the period of total war, the institutional struc-
ture of the profession appeared to be archaic
and inappropriate for the representation of
occupational interests to an increasingly
powerful centripetal state. The prevailing cli-
mate of national unity and the envisagement
of a new post-war order during the middle
stages of the Second World War provided an
opportunistic moment for addressing the pro-
blem of the organization of the accountancy
profession.
The response of the professional associa-
tions was to constitute a peak organization
in the form of the Coordinating Committee
as the vehicle for making uniIied representa-
tions to government. On the basis of unspeci-
f i c messages from certain ministers
concerning the need for the profession to
address the question of its organization, the
Coordinating Committee became the progeni-
tor of a scheme for the licensing of public
accountants and the creation of central coun-
cils comprising representatives of professional
institutes. Although the proposed Public
Accountants’ Councils for England and Wales
and for Scotland would consult government
on matters of mutual concern their primary
object was to maintain a register of accoun-
tants in public practice. The cause of “co-ordi-
nation” thus became essentially a nom de
pl ume for registration.
Ultimately, the Coordinating Committee
failed to achieve its principal object because
its leading figures responded to the demand
for the reform of professional organization by
once more attempting registration. Such an
attempt at social closure to benefit the majority
section of a single occupational group was
alien to the prevailing consensus and collecti-
vist politics. As a result, support from suc-
cessive governments and the relevant
sponsoring ministry was deficient - each had
more important policies to frame and imple-
ment during the period of national emer-
gency, reconstructon and welfare socialism.
Further, the “coordinators” miscalculated the
power of mandarin civil servants to determine
the content and progress of legislation and the
extent to which the bureaucracy could enforce
modifications to group demands in order to
protect its own interests.
Within the profession the organic cohesion
which characterized wider societal relation-
ships in wartime was only partly achieved
among the accountancy organizations. From
1942 to 1946 in particular, internecine conflict
among some of the participants delayed the
framing of legislation for the profession. The
legacy of separate institutional development
and the construction and entrenchment of
divergent constitutional and ideological struc-
tures among the accountancy organizations
proved difficult to reconcile with the imposi-
tion of unifying zenithal bodies such as the
Coordinating Committee and the proposed
Public Accountants’ Council. Further, the long
history of attempts by successive organizations
to operate status defining closure practices and
the inter-organizational hostilities which
emerged as a result ensured that the need to
carry the occupational populace in a measure
to regulate accountancy practice proved elu-
sive and was only achievable at the price of
devising diluted proposals which were unpalat-
able to those who instigated the coordination
movement.
Despite the inability to attain its primary
objective of the registration of public accoun-
tancy, the efforts of the Coordinating Commit-
500 S. P. WALKER and K. SHACKLBTON
tee were rewarded when its leading partici-
pants were enlisted to form the Accountancy
Advisory Committee in order to implement the
auditor qualification provisions of new compa-
nies legislation. In this way, the state effectively
conferred licensing powers on the profession
in the reahn of public company audits. Further,
as a result of the discourse on co-ordination
some degree of integration in the British profes-
sion was achieved in the formation of ICAS in
1951 and the merger of the chartered societies
with the SL4A in 1957. The institutional struc-
tures which emerged from the 1950s have
since remained substantiaIly unaltered.
The study of accounting history is frequently
advocated due to its potentially supportive role
in the development of contemporary policy
making (Previts et al., 1990, pp. 3-5). The co-
ordination movement of the 1940s and 50s and
the context within which that debate was con-
ducted provides important insights for those
who continue to seek the rationalization of
the profession in Britain.
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