Making Up Accountants

The Organizational and Professional Socialization of Trainee Chartered Accountants

Fiona Anderson-Gough, Keith Robson, Keith Robson

• Publisher: Routledge
• Year: 2018
• ISBN:
  9780429830006
• Edition: 1
• Topic: Economia
• Subtopic: Condizioni economiche

First published in 1998, this organizational and professional socialization of trainee chartered accountants reports the findings of an ICAEW funded research project which explored the training and socialization of trainee accountants in two Big Six firms in the UK. The background to the research, particularly the under-researched nature of the socialization of accountants, is outlined. The research issues are located within the institutional context of the accounting profession in the UK and the academic literature on the professions and professional socialization. The main research findings reported concern. The main research findings reported concern the development of trainees' understandings of their professional indentity; the role of formal processes and informal norms within socialization; the relationship of professional identity to notions of client service, firm identity, divisionalization, and career success.

1 Professional Socialization in Chartered Accountancy Practices

Introduction

The recruitment, training and socialization processes of professional associations, firms and partnerships have received considerable attention in the literature on, for example, the legal (e.g. Rueschemeyer, 1973; 1986; Abbott, 1988) and medical professions (e.g. Freidson, 1970; 1986). Socialization processes should not be confused with ‘socializing’ in its everyday sense of informal leisure-time friendships (cf. Accountancy Age, 14^th March 1996). Whilst these latter may have a role in professional socialization, the term refers to the whole gamut of ways in which the meaning and conduct of professional membership is transmitted. This ‘making’ of professionals has been regarded as a crucial contributor to the success of the professionalization projects of particular occupations (see the readings in Dingwall and Lewis [eds], 1983). Self-regulation has been considered one of the essential traits of a professional organization, alongside the presence of an abstract body of knowledge, monopoly control of certain work tasks and a public service ethic: (cf. Goode, 1957; Greenwood, 1957; Parsons, 1968). The notion of self-regulation, however, can be considered not merely in terms of the bureaucratic authorities, rules, regulations and standards that govern work content and best practice in each profession (in accountancy, for example, the ethical guidelines and Disciplinary Committees, Members Handbooks, Accounting and Auditing Standards), but also in relation to the manner in which professionals conduct themselves with respect to other professionals and to the clients whom they service. Part of being a professional person involves a ‘regulation of the self in terms of the articulation of a professional discourse, the following of formal and informal norms of conduct: in short, the expectation of appropriate personal and social behaviour from oneself and from others.

In this book we examine how this second type of self-regulatory norms is constructed for and communicated to trainee Chartered Accountants (CAs) in two of the large international (‘Big Six’) firms. The Big Six are those firms which dominate the markets for accounting and auditing services worldwide. Although it has been argued, and we would concur, that the process of socialization in professional firms is crucial to the professionalization projects of all professional occupations, and has been recognised as such in relation to many professions, there has been remarkably little study of the recruitment, training and socialization of accountants (see Harper, 1988; Power, 1991; Coffey, 1993; Dirsmith et al, 1997; Grey, 1994; 1998; Coffey, 1994; Hanlon, 1994 for the principal, albeit partial, exceptions). The research problematic with which we began was to examine how professional socialization occurs within the Big Six firms and how CA trainees within the firms identify with the concept of the profession and the professional. In the next section we elaborate our research problematic and outline the themes of the book.

1. Professional Socialization in CA Practices: Making Up Accountants

To qualify as a chartered accountant licensed by the Institute of Chartered Accountants in England and Wales (ICAEW) there are two formal requirements. First, it is necessary for trainees to pass the examinations set by the ICAEW, and, second, to prove to the ICAEW that they have undertaken the type and amount of work as set out by the ICAEW as a minimum standard of experience. To this end, the vast majority of people wishing to qualify as a CA apply for a training contract with an accounting firm that is authorised by the ICAEW. The training contract is usually for three years during which time the trainee agrees to work for the firm, and the firm agrees to provide the necessary work experience, examination tuition and to pay the examination fees. In recent years it has been the norm for those entering training contracts to be graduates.

The entry of new recruits into a profession has a number of common themes across different professions. Recruits receive specific training through formal (and costly) instruction: perhaps by correspondence course, through an organization of professional tutors or an institute of higher education. The explicit testing of instructed knowledge pertaining to professional or legal rules and regulations, abstractions from specific work practices and detail of technical procedures is one of the most obvious ways in which the profession can erect an effective barrier between the professional, who, having succeeded in completing his or her studies, is able to practice as an accountant, lawyer, etc., and the layperson, who is disallowed from such occupational tasks (Johnson, 1972; 1977; Willmott, 1986).

We contend, however, that the making of the professional accountant (or lawyer or clinician) is not reducible to the procedures for schooling and examining new entrants in the rules, regulations and procedures of the occupation. This assertion is borne out by the recognition that many professional groupings require prospective entrants to the profession to undertake a minimum period of training in practice - in the case of the ICAEW this means, with some recent exceptions, a period of training within public practice.

Although the period of public practice might be seen simply as a form of apprenticeship into the craft of accountancy and auditing, the attention to performing technical services to clients is only part of the experience and practice of becoming the professional person. The training of the auditor is also in large part a socialization into the organizational culture and professional norms of the employing firm. At the very outset, the recruitment of trainees is itself a social process in that interviewers and personnel staff examine the profiles and responses of applicants in interview in accordance with their conceptions of the ‘professional’ auditor, as well as the firm’s ‘type’. The training of new entrants to the profession embraces more than simply an inculcation into technical accounting and auditing procedures (and the examination techniques through which they are tested): the culture of the audit firm provides a new environment to which they must adapt themselves and identify what it means to be ‘professional’. The focus of this book is upon the ways in which such an identity is acquired in the context of the informal, organizational norms of the firms studied. What organizational norms operate, how they are constructed and transformed, and how successfully trainee auditors recognise and accommodate themselves to those norms are key elements that structure, we would argue, the career path of trainee accountants: organizational socialization is thus an important component of the ‘making’ of professional accountants.

Earlier work has suggested that the nature of the formal and informal rules that structure professional success is complex (e.g. Becker et al, 1961). In the case of accounting this is in part the outcome of the training process that is first and foremost a commitment to an individual firm, competing with other firms, and not primarily a commitment to a professional grouping. As Abbott has noted with reference to the accountancy profession in the US, in such contexts ‘the association of work with profession is broken, and with it much of the professional association’s power’ (Abbott, 1988, p. 154). Such an observation illuminates some of the professional associations’ difficulties in securing the consent of their membership to proposals for regulatory and structural change (Tricker, 1983; Worsley, 1985). As one influential senior professional has remarked:

“It seems that major internal reforms are only possible if the membership does not appreciate the significance of what is happening” (Davison, 1987, p.2).

Socialization in the auditing firm may, in addition, be complicated by the different organizational cultures present in each of the Big Six firms: we sought also to assess this claim.

Not only does professional socialization occur within firm-specific contexts but also within the added complexity of the general array of functions and services that the multi-national auditing firms now perform (Hopwood et al, 1989). The nature of the accountancy profession has become more complex as ever more diverse functions are performed by auditing firms: it is misleading to think of chartered accountancy as a homogenous profession (Robson and Cooper, 1990). Instead, and in common with some other professions, accounting firms are increasingly characterised by an assortment of functional and organizational pressures and loyalties that cut across the profession as a whole (Robson et al, 1994). We aimed to examine the extent to which the various tasks performed within the modern international auditing firm, some of which have no direct connection to the formal knowledge and training of auditors, may impact upon professional socialization, and vice versa.

2. Research Themes and Objectives

The research upon which this book is based used interview-based case studies to examine the processes through which audit trainees recognise, define and acquire the attributes of the accounting professional, and how those who are ‘successful’ in this are distinguished through the organizational culture from those who are not. The case studies were conducted in the regional offices of two major international accountancy firms.

2.1 Professional Socialization: Three Theses

The research focused upon three major issues:

• What processes of socialization occur in the course of auditor training contracts, e.g. professional examination training, staff assessments and informal norm-setting?

Thesis 1: Socialization processes focus not only upon examination performance, but presentation to clients and ability to integrate with the social norms of peers, managers and partners.

• To what extent can the processes of professional and organizational socialization be separated, and to what extent do corporate culture initiatives within particular firms mitigate against, or contribute to, the maintenance of a coherent professional identity?

Thesis 2: The socialization of trainees is into organizational culture first and professional culture second.

• What is the impact of the functional divisions (e.g. audit, tax, insolvency) upon professional socialization?

Thesis 3: Socialization processes vary between divisions and give rise to differing conceptions of the role of the professional accountant.

2.2 Research Methodologies and Methods

The research methods employed included semi-structured interviews and analysis of documentary evidence. Members of the personnel staff, training partners, seniors and trainees were interviewed by one or two of the researchers in a semi-structured format in order to elicit their views on and interpretations of the culture of their audit firm with respect to both formal and informal norms of ‘professional’ attitudes, behaviour and conduct. The interviews allowed the researchers to report and gain insight into the experiences and problems organizational actors face in recognising and following forms of approved ‘professional’ behaviour. Our methodological approach in this study owes its basis to ethnographic or, more broadly, phenomenological research in that rather than imposing meanings upon our research subjects we were concerned to explore the meanings that subjects gained and the processes through which they gained them during their socialization into the culture of their auditing firm. The research sought to interpret the understandings, as re-presented to us, that audit trainees acquired during their training contract on the issues of professional identity, firm identity, (and, indeed to what extent these concepts can be understood separately, if at all, by trainees), and the relationships of trainees to their professional institute.

Each interview lasted for approximately one hour and was tape recorded (when acceptable to the subject). The interviews with trainees were transcribed and analysed with the assistance of The Ethnograph, a Qualitative Data Analysis Software package. The research also examined the various forms of documentation on the appraisal of trainee auditors to inform the understanding of the construction of the professional accountant and his/her social world. The rules and regulations of the accountancy bodies pertaining to the training and examination process, and the manner in which these rules are translated within the professional firms were also studied in order to examine the influence of the wider project of professionalization that accountants have mobilised to enhance and to further their professional status.

In order to capture some variations in organizational culture across audit firms, two regional offices within two international (‘Big Six’) firms were selected as research sites. We were fortunate to secure excellent access to these firms which we refer to as Firm A and Firm B. We elaborate these methodological points in Chapter 3. The findings of our research are reported in Chapter 4 (Thesis 1), Chapter 5 (Thesis 2) and Chapter 6 (Thesis 3).

2 Theories of Professions and Professional Socialization

Introduction

In this chapter we seek to address three issues. First, what are the main features or characteristics that ‘professionals’ themselves would stress in order to distinguish themselves as professionals to others? What is, or might be, the self-image of a profession? The question as to how trainee accountants are socialized as ‘professionals’ commonly presupposes that there are certain features in a discourse that we can identify as constituting professionalism: the professional discourse that contributes to the practices of being a ‘professional’. Put another way, there might be ways of thinking about being professional that academics or, indeed, lay people would regard as differentiating a professional person from, say, a highly skilled car mechanic. Therefore one starting point for an analysis of professional socialization is an outline of the professional discourse as it is commonly or conventionally articulated.

The second issue we address in this chapter is how the organization and structure of accounting practices in the UK mediates the concept of being an accountant. Here we are concerned with the way in which the institutional and organizational arrangement of accounting practices may influence the idea of an identification with or affiliation to a profession. The form of professional identity assumed by accountants and auditors cannot be understood in the absence of an appreciation of the organization and structure of accounting practices in the UK and the tensions that emerge from these practices. We examine the professional context of accountancy and how the ‘discourse’ of the profession is enabled or constrained by the occupational arrangement and activities of accountants. In this way it is possible to consider what tensions have emerged for accountancy’s ‘professionalization project’: the continuing process of maintaining a discourse that projects accountancy as a profession to its members and to important external agents. The examination of such an issue, however, is both speculative and preliminary to the analysis of our research into two Big Six firms and the views of trainees as to their identification with a profession. In the next section we consider some of the conventional meanings attached to the notion of profession and being professional.

In the third part of this chapter we link our research to the existing research on professions more broadly. The main theoretical approaches to the study of the professions are...