The Institute of Accounts: Nineteenth century origins of accounting professionalism in the...

The Institute of Accounts Nineteenth century origins of accounting professionalism in the United States Steven E. Loeb and Paul J. Miranti London and New York: Routledge, 2004, ISBN 0-415-28874-6).

The accounting body that forms the subject of this book is described by the authors as a "transitional"

organisation. It was founded in 1882 as the Institute of Accountants and Bookkeepers of the City of New York, and renamed the Institute of Accounts (IA) in 1886. The formation of this organisation therefore preceded by some four years the American Association of Public Accountants - which is usually nominated as the earliest direct forerunner of today's American Institute of Certified Public Accountants (AICPA). In 1940 the IA merged with the body that would become the AICPA, but by that time the IA was only a shell of an organisation. It would be wrong to dismiss the IA as a failed organisation; but neither could it be characterised as a great success. Therein lies the novelty and importance of this book. Accounting historians have, understandably, tended to give priority to recounting the organisational histories of the accounting associations that form the direct lineage of today's largest and most influential bodies. Loeb and Miranti show that much may be gained by extending such studies to those associations - such as the IA - which have been presumed to be on the margins of the organisational genealogy of accounting professionalism but may have exerted influence in a variety of more subtle ways.

The book is organised into six "sections", commencing with a brief introduction followed by an overview of the origins, goals, membership and other characteristics of the IA. Section three evaluates the functionality of the organisation and its role in the professionalisation of accounting in the USA. section four is titled "The structure of accounting knowledge and the natural order of society," while section five outlines the decline of the IA. Under the heading of "Legacy" the sixth and concluding section provides an evaluation of the significance of the organisation.

The authors present a persuasive case for greater recognition of the role played by the IA in the professionalisation of the accounting occupation in the USA. Indeed, the study "raises the possibility that the lineage of the AICPA dates to 1882 [when the IA was founded] rather than 1887 ... as has been traditionally assumed" (p.6). While this might remain a matter of ongoing debate, what is evident from Loeb and Miranti's book is that the IA did play an important role in shaping notions of what constituted "professionalism" in the USA as the country moved towards the twentieth century. As recounted by the authors, "On one level the organisation was dedicated to accounting education and the advancement of accounting knowledge, while on the other it sought palpable economic benefits for its members" (p.7). The characterisation of the IA as a "transitional" organisation thereby embraces two themes. First, as a formal organisation the IA provided a prototype for the later and more successful occupational associations that would ultimately supplant it. Second, the IA played a role in the development and clarification of the ideology of professionalism. Reflective of both these functions, the IA "helped to crystallize new attitudes among its members about the purposes of professional organizations" (p.43).

The objectives of the IA make evident its original hybrid character - part professional association and part guild. On the one hand, there was a concern with the development and dissemination of technical knowledge, including lectures and organised discussion groups. On the other hand, the IA was explicit in seeking to protect and advance its members' interests - for example, by aiding them in obtaining positions of employment. A mutual life insurance scheme also operated for members. The public interest avowal that would later come to characterise the claims of occupational groups seeking professional status was, it seems, not yet fully formed in the case of the IA. Reflective of this, although the IA is attributed with a "moral intent", no formal code of ethics has yet been located for the organisation (p. 15). The subtitle of the book - with its reference to the origins of accounting professionalism - is therefore very apt. Rather than appear suddenly as a fixed concept, professionalism in accounting evolved, and a persuasive case is presented for the IA playing an important role in that evolution. The individual contributions of some of the key personnel that were associated with the organisation are identified as important elements of this process.

Ultimately the authors attribute the decline of the IA to a lack of specialisation in its knowledge base, its "lack of concern with the market opportunity that was associated with the rise of public accounting, and its loss of status as leader of progressive professional change" (p.55). The Institute of Accounts will be of great interest to scholars interested in the emergence of accounting as a professional occupation. It should also act as a stimulus for the further study of occupational associations that, at first glance, might appear to have had only marginal roles in accounting's history. The concept of the "transitional" or "semiprofessional" (p.66) organisation - exemplified by the IA - is one that warrants further exploration. The authors of this work are to be commended for the thoroughness of their research and for drawing greater attention to how the IA was a more significant organisation than might previously have been generally assumed.

AUTHOR_AFFILIATION

Brian P. West

University of Ballarat