Thomas A. Lee

The professionalization of accountancy

Reviews the history of the early development of the accountancy profession in the UK and the USA and describes the organization of professional accountancy bodies in both countries, concentrating particularly on events in the post‐formation period. Identifies the persistent struggle of UK and US accountants with the conflicting phenomena of economic self‐interest and public duty. Shows how professional accountancy in the UK and the USA evolved from internalized disputes to externalized defences of the professional mission. This evolution caused the actions of UK and US accountants to be scrutinized increasingly in public. Researched evidence of recent institutional reaction to such scrutiny is consistent with earlier behaviour associated with formation events. The economic self‐interest of accounting professionals appears continuously to have motivated their actions to protect the public interest.

The editorial gatekeepers of the accounting academy

Proposes to evidence the colonization of the accounting knowledge production process by a relatively few elite institutions in the USA. By examining the doctoral origins of the editorial board members of six major accounting research journals between 1963 and 1994, demonstrates the extent of the colonization and its potential to bring closure to the knowledge production process. As such, the results are consistent with previous studies by Lee (1995) and Williams and Rodgers (1995), and improve our understanding of the history of the professionalization of accounting research.

Identifying the founding fathers of public accountancy: the formation of The Society of Accountants in Edinburgh

Despite histories of the early Scottish accountancy bodies (e.g., Brown, 1905; Stewart, 1977; Walker, 1988; Kedslie, 1990a, 1990b), there has been little research in depth to identify the small group of men who felt compelled to form the first professional organization in 1853 (The Society of Accountants in Edinburgh [SAE]). This paper describes the sequence of formation events and meetings in 1853 and 1854, and identifies those individuals most closely involved with the planning of the SAE. The main achievements of the study are to record the men and events of the SAE formation in a detail not previously attempted, and to demonstrate the elitist nature of the formation. The overall conclusion is that the emergence of the SAE in the mid-nineteenth century was as much the creation of a social elite as it was an economic monopoly.

Financial Reporting Quality Labels

Analyses a policy‐making issue concerning historically persistent phenomena with the potential, concurrently, to assist the social construction of the audit profession, and create expectation problems capable of accentuating the present audit crisis. The phenomena are the financial reporting quality labels commonly associated with the auditor′s opinion on the content of reported financial statements. Reveals the close historical relationship of accountancy and law in a process of professionalization in which accountants and lawyers vaguely and ambiguously describe financial reporting quality by means of various labels and supporting criteria. The analysis also suggests the strategic benefits and disbenefits of reporting quality labels and criteria to the audit profession within the context of the expectations gap.

US public accountancy firms and the recruitment of UK immigrants: 1850‐1914

Reports on the role of UK emigrants to the USA in the creation and early development of its public accountancy profession. Explains findings in the context of US public accountancy firms founded by UK immigrants and focuses on the recruitment of qualified and unqualified public accountants from the UK. The study is based on searches of relevant archives in the UK and USA. The evidence reveals UK immigrants played a substantial part in the formation and early development of both public accountancy firms and institutions in the USA. However, the recruitment of immigrants by US firms appears to have been a temporary phenomenon pending the supply of US‐born accountants with suitable training and experience. The firms examined include local and national firms. Subject to data retrieval limitations, a major conclusion of the study is that unqualified immigrants played significant roles in the early histories of firms and institutions of US public accountancy.

Social closure and the incorporation of the Society of Accountants in Edinburgh in 1854

The incorporation of the Society of Accountants in Edinburgh in 1854 has been researched from different perspectives without attention to the overall occupational grouping to which the founders belonged. The existence of this larger community of accountants raises the question of whether the foundation involved social closure. The purpose of the paper is to pose and respond to this question by explaining social closure, examining the Societys foundational process for signs of possible exclusion, and observing founders and non-founders to identify differences in characteristics that provide possible explanations for exclusion. Archival evidence of the foundational process and differences in characteristics is consistent with the possibility of social closure without precluding other explanations for the founder and non-founder groupings. The evidence also raises the question of whether the foundation of the Society is completely explained by the external pressures associated with a potential loss of court-related appointments. The findings in the paper are sufficient to encourage further research of social closure in other associational foundations in the early history of modern public accountancy.

Going where no accounting historian has gone before

Purpose – The purpose of this paper is to introduce counterfactual analysis and reasoning to the study of accounting history. The counterfactual focus is the institutionalisation of public accountancy in the UK.Design/methodology/approach – The study adopts a counterfactual research design using Ferguson and Bunzl and asks a “what if” question of an event of importance to accounting historians in order to create a plausible counterfactual outcome that is grounded in rationality and causal analysis. The specific counterfactual question relates to the royal charter granted to public accountants practicing in Edinburgh in 1854. The counterfactual outcome is compared to the actual timeline of public accountancy institutionalisation in the UK.Findings – The “alternative” history reveals uncertainties that confronted public accountants in the past and provides a basis for suggesting that the current fractured and inefficient state of institutionalised public accountancy in the UK has its origins at least partia...

The professional journal as a signal of movement to occupational ascendancy and as legitimation of a professional project: the early history of The Accountant's Magazine 1897–1951

This article chronicles the early history of The Accountants Magazine and provides explanations of its role within the professional project of the first generations of Scottish chartered accountants. The journal appeared in 1897 as part of a federal structure constructed to promote a unified image of chartered accountancy in Scotland in response to challenges to its occupational ascendancy. Between 1897 and 1951, the journal was managed and edited on a part-time basis by practitioners and required continuous financial support from its three sponsoring professional bodies. Also during this period, its content portrayed public accountancy as a profession of diverse skills and marketable services. However, the journals subscription membership included only a small minority of members of the three sponsoring bodies. The article argues that the early history of TAM is consistent with sociological explanations of the professional project. At the time of its creation, it was a signal of movement to occupational ascendancy. Subsequently, it became part of a more general process to establish the legitimacy of the professional project of Scottish chartered accountants within the wider business community. In the absence of prior sociological theory to explain the role of the journal in the professional project, the article also provides several propositions to construct such a theory.

Reflections on the origins of modern accounting

The purpose of this paper is to use an historical lens to assess the prospect for West’s (2003) challenge to accountants that, in order to halt the demise of accountancy as a profession, there is a need for a body of knowledge with sufficient cognitive authority to generate accounting numbers that are functionally fit for use. The paper uses two origins of modern accounting to consider West’s challenge. These are double-entry bookkeeping and accountancy professionalization, both argued to be primary influences on the current state of accounting and the accountancy profession. The historical consequences of both origins are observed as an ambiguous relationship between the accountancy profession and the state, an accounting practice without a coherent and consistent theory, and accounting research that is largely irrelevant to practitioners and standard-setters. The paper concludes that, unless accountants identify and control an authoritative body of accounting knowledge, there is little prospect for halting the demise of accountancy as a professionalized occupation. The paper suggests that an appropriate conduit to identify an authoritative body of knowledge is accounting research and a relevant means to control it is the social closure of accounting education and training programmes.

Paul and Mackersy, accountants, 1818–34: public accountancy in the early nineteenth century

The purpose of this paper is to present a contextualised history of a Scottish public accountancy firm in the first half of the nineteenth century. The minute book of a private dining club identifies the employees of Paul and Mackersy, Accountants of Edinburgh from 1818 to 1834, and national archives provide data on the firms client services as well as the careers and other activities of its partners, clerks and apprentices. The study also observes financial matters consequent to the deaths of Lindsay Mackersy in 1834 and William Paul in 1848. The paper uniquely reveals the structure and operations of a leading training firm in the early period of the modern history of Scottish public accountancy, its strong association with the legal profession and landownership, the contemporary jurisdiction of public accountants, and the potential for practitioners to fail despite their elite professional status.