Sociological Perspectives on Modern Accountancy

Robin Roslender

• Publisher: Routledge
• Year: 2002
• eBook ISBN: 9781134973873
• Edition: 1
• Topic: Social Sciences
• Subtopic: Sociology
• Index: Social Sciences

First Published in 2004. The subject of this text is modern accountancy, which is to be considered from a sociological perspective. The logical starting point is to map out the chosen subject, modern accountancy, before saying something about the particular disciplinary perspective, sociology, from which it is to be viewed. The volume is split into two parts the sociology of accountancy and Sociology for accounting.

Part I

The sociology of accountancy

Chapter 1

The profession

The initial requirement of any study such as this is to provide a sociological analysis of the professional nature of modern accountancy. In the first section the professions and professionalisation are discussed in a general way and at some length. This provides a basis for considering the nature of the profession and its members. It is followed by a discussion of the organisation of the profession in the UK and abroad which focuses on the many institutes and associations of accountants. Recruitment and socialisation are considered in the third section, particular attention being paid to the educational and training experiences of student members. In the final section a light-hearted description of the public's image of the accountant is sketched out. This is subjected to some criticism in an attempt to highlight some of the points which have been made in the previous pages and to provide a broader basis for the rest of the text

PROFESSIONS AND PROFESSIONALISATION

The sociology of the professions is a well-established field and as such it has attracted contributions from some of the discipline's major figures. In the past decade or so it may have become a little less productive (cf. Atkinson & Delamont, 1990) but nevertheless it has a rich and voluminous literature which can only be touched upon here. Many of the foundations were laid in the work of Emile Durkheim, one of the founding fathers of sociology at the turn of the twentieth century. In his view, professional organisations in the form of moral communities based upon occupational membership were a prerequisite for the process of orderly transition to a new social consensus (Durkheim, 1957). In his earlier works he had described the breakdown of the established order of central Europe in the wake of the rapid industrialisation of the later nineteenth century. He took the view that in order to avoid total social disintegration, a state which he termed anomie, a new form of social and moral order must be found (Durkheim, 1933). As he approached the end of his life he came to believe that professional ethics could serve as the fount of a new moral order. A similar view was embraced by the English social philosopher Tawney who saw in professionalism a major force which was capable of opposing the rampant individualism of the acquisitive society. He believed that the professions promised to advance the community interest and for this reason they should themselves be promoted (Tawney, 1921).

During the inter-war years commentators such as Carr-Saunders & Wilson (1933) and Marshall (1939) wrote approvingly about the contribution which such occupations were making to society. The twin themes of altruism, or other orientation, and the service ethic were widely addressed as the case for the professions grew stronger. For this reason it was hardly suprising that when the sociology of the professions began to emerge as a distinctive field within American sociology such occupations were characterised in a highly positive way. The twenty years following the end of World War II saw American sociology dominated by the structural-functionalist perspective which required the sociologist to study how the various structures or institutions of society were functional (or not functional) for the broader society. Any institution was a legitimate field of study and most attracted attention over time. Among these were the professions, of course, the objective being to demonstrate their functional relevance to society at both the general level and in the context of the professional-client relationship. Structural-functionalism's leading theorist, Talcott Parsons, was himself very interested in the professions, especially the medical profession, and as a result he discussed them on many occasions. He argued that they were of great importance to society because of their collectivity-orientation which he contrasted with the self-orientation which he believed characterised business and commerce (Parsons, 1954). At the level of practice Parsons drew attention to the way in which the professions give primacy to the valuation of cognitive rationality as applied to a particular field, a feature which he sees to be consistent with the functional imperatives which characterise modern societies (Parsons, 1968). The same issues were addressed by another structural-functionalist, Barber, who argued that it was because the professions recognised their importance to society but did not capitalise upon it that they were functionally relevant to society. By implication those occupations which were not so community-oriented were not accorded the same freedom of action as the professions and were not to be viewed as functionally relevant in the same way (Barber, 1963).

Most of the sociology of the professions produced during the 1950s and early 1960s did not assume this abstract theoretical form, however. Instead writers tried to explain why some occupations were viewed as professions, and some were not, by identifying the defining characteristics of a profession. This more middle-range approach to theorising about the professions is best seen as complementary to the general theory issuing from writers such as Parsons or Barber since it remains firmly within the structural-functional tradition. There are many examples of this sort of approach but perhaps the best known is that offered by Greenwood in 1957. In his view there are five defining characteristics of a profession, the first being that they have a basis in systematic theory. This implies that it requires a prolonged training process to develop a professional competence with the result that qualification as a practitioner normally occurs many years after leaving high school and only as a result of success in an extended formal examination programme. On the basis of this formal accreditation of competence the professional is recognised by the public to have the authority to practise in a particular field. Writing in the American context Greenwood has in mind the situation of licensing which exists on a much broader scale than in the UK. Recognised authority, the second characteristic of a profession, is embodied in a licence to practise in a particular field to the exclusion of all other parties. By implication only where an occupation attracts a licensing arrangement can it be described as a profession. The third characteristic identified by Greenwood is what he terms community sanction. By this he has in mind such situations as consenting to a doctor's request to remove one's clothing and to undergo an examination. Most people accede to such requests because they recognise the doctor's need to carry out examinations under such conditions. For Greenwood only a minority of occupations are accorded similar rights and privileges. Because such professions are in a position of possible exploitation it is necessary that they are responsible for policing their members. This is achieved by ensuring that all members are aware of and abide by the codes of ethics which true professions must have. So for Greenwood the possession of a code of ethics is the fourth characteristic of any profession. Finally he identifies that these codes constitute only a part, but a major part, of the culture of any profession. By a culture he has in mind the many dimensions of the lived experience of people in such occupations as medicine or law, the same characteristic which had attracted Durkheim’ s interest half a century earlier.

One of the implications of Greenwood's or similar trait models such as those of Cogan (1953) or Goode (1960) is that it might be possible for occupations to gauge just how professional they presently are and how it might be possible to improve the collective situation of practitioners. In the status conscious early 1960s this is more or less what happened in America, prompting a leading sociologist to discuss the possibility of everyone becoming professional to some degree. Wilensky's 1964 paper was both an extension and a critique of the existing characteristic of a profession literature. He identifies a typical sequence of events based on the development of eighteen occupations generally recognised as being professions—the natural history of professionalism. This history takes the form of a five stage process: initially a full-time occupation emerges and in time practitioners set up a training school of some description. The third stage sees the foundation of a professional association which begins to lobby in order to achieve the legal protection it recognises it will benefit from. Finally the association adopts a formal code which serves to guide its operations in the future. Wilensky then goes on to say that the passage of time has seen an increasing tendency for occupations in pursuit of professional status to depart from this sequence of events and that it is now of historical rather than contemporary interest. This is of relevance to the popular view that to some degree all occupations were becoming professional, a thesis which Wilensky wishes to refute. Drawing on the evidence of contemporary quests for professional status, he concludes that ‘the whole effort seems more an opportunistic struggle for monopoly than a “natural history of professionalism”’ (Wilensky, 1964, p. 157). At the same time many of the ‘new’ professional occupations do not have a great deal of autonomy nor exhibit much of a service ideal, irrespective of their intellectual integrity. This is particularly so for those occupations associated with large-scale organisations and bureaucracies. For all these reasons Wilensky concludes that it is unlikely that many occupations will be able to attain the status of the established professions and so the professionalisation of everyone is not about to happen.

Wilensky's paper was published at a time when a growing number of sociologists were becoming aware of the various problems entailed in the adoption of a structural-functional perspective for the study of society and its constituent parts. In the context of the professions it was already apparent to other writers that there was little value in attempting to generalise about them. After reviewing the work of twenty-one authors who had attempted to define the essence of the professions Millerson concluded that not one trait was common to all, nor did any two characterisations concur (Millerson, 1964). In the same year Rueschemeyer asked whether it was possible to talk in general terms about even medicine and law, the two most commonly cited professions. Three years earlier Bucher and Strauss had identified a number of divisions within the medical profession which they presented as being far from the united professional community implicit in the functionalist orthodoxy. These two writers were also leading figures in one of the alternative theoretical perspectives which was beginning to gain support in the early 1960s. Known as symbolic interactionism, the focus of this perspective was at the level of the individual rather than on the broader social whole (as in structural-functionalism) with particular emphasis upon the role played by signs, imagery, impression management, etc., in structuring social reality. Their paper was an example of the insight which this alternative perspective could provide. Other influential interactionist writers such as Becker (1962) and Hughes (1958) advocated a critical approach to the study of any profession. No longer should claims of altruism, community interest or commitment to the service ethic be taken at face value. These were powerful images or symbols which could be used in a variety of ways. Very soon students of the professions influenced by interactionism assembled a literature which served to debunk many professional claims and practices (e.g. Carlin, 1966; Freidson, 1970). This led one writer to describe any sociologist who chose to adopt a functionalist perspective on the professions as a ‘dupe’ of the established professions and thereby not performing much useful sociological analysis at all (Roth, 1974).

One of the most commonly identified negative practices of the professions, and at the same time a key factor in successful professionalisation, is the phenomenon of social closure. Introduced into the literature of sociology by Max Weber, social closure is the process whereby one social collectivity seeks to exclude other groups from access to some desirable reward. In the case of the professions social closure refers to the ways in which professions go about ensuring that potential competitors are excluded from performing particular categories of work and are thereby unable to obtain the rewards associated with that work (Parry & Parry, 1976). One of the key techniques of social closure is credentialism (Parkin, 1979). A credential is some formal measure of competence such as a professional qualification which is accepted as being the basis for performing certain sorts of work. If a profession is able to convince society that it is necessary to have a particular qualification in order to carry out certain work it can control access to that work and more significantly to the rewards associated with it. As well as excluding other groups, credentialism can also serve as a mechanism to restrict the supply of competent practitioners, a charge which has often been raised against the professions. Other writers interested in the relation of professions to the market have focused on the idea that the process of professionalisation can be understood as a collective mobility project which if successful can enhance the life-chances of individual participants in significant ways (e.g. Larson, 1977).

In his paper Wilensky talked of the established professions and of newer professions developing different structural forms. This line of analysis was later to be successfully pursued by several writers including Elliott and Johnson. Elliott (1972) identified two types of profession: status professions and occupational professions. The former are comparatively rare and in Elliott's view are unlikely to increase in number. They are long-established and tend to have had a history during which their contribution to society has become increasingly more focused. Whereas in earlier days members were men of letters and often offered a range of services, their counterparts offer specific but highly valued services. The status of these professions is based partly on their traditions and partly on their contemporary functions. By contrast the occupational professions are much more recent in their origins, many having been called into existence by the industrialisation process of the later nineteenth century. Both their modernity and specificity contribute to their lack of status. Many of the occupational professions may have grounds for expecting a much higher status but since status is accorded by the public it is their view which is crucial. This is why Elliott, like Wilensky before him concludes that there is little chance that many new status professions will emerge in the present day.

Johnson offered an analysis of the professions based on the existence of three different power relations involving the practitioner and the client (Johnson, 1972). The first is where the professional defines the needs of the client and the manner in which these needs are to be catered for. The practitioner is in control of the situation, and more significantly this control is accepted by the client. In order to ensure that this control is not misused such professions go to great lengths to police their members’ activities. It is this collegiate control situation where the profession imposes a form of collective self-control that reassures the public that it will not suffer by accepting the loss of power entailed in any consultation with such practitioners. For Johnson this is the sort of arrangement which has given rise to much of the existing literature. It is not the typical situation of the professional although it was in the past It is typified by the sole practitioner or small partnership arrangement characteristic of the legal and medical professions. At times Johnson comes close to concluding that these are the only true professions but in identifying two other forms of practitioner-client power relations he effectively identifies two further types. The first are those involved in the opposite form of relationship, where it is the client who defines both his/her needs and how these are to be met There have been two principal variants of this relationship which Johnson terms oligarchic and corporate patronage. The former is associated with traditional aristocratic societies such as seventeenth and eighteenth century England or Renaissance Italy when the rich were the patrons of a range of individuals including artists, musicians, couturiers and on occasions architects and physicians.

Corporate patronage is the contemporary variant where it is the large-scale corporation which is the client and professionals such as engineers, systems analysts or, in Johnson's view, accountants, who perform the services as defined by clients. Most although not all of these practitioners are ‘housed’ professionals in the sense that they are employees of corporations and thereby involved in applying their expertise to ‘local’ corporate matters. They are employees rather than the independent practitioners associated with the exercise of collegiate control. Their numbers have increased rapidly with the growth-of industry and more recently business and commerce. They have also become more manifold as new needs have been defined. In this way it is possible to see that Johnson's corporate professions are very similar to Elliott's occupational professions, both being significantly different from traditional, independent, (high) status professions. However, Johnson identifies a third form of practitioner-client power relation which he believes to be significantly different. Here the state is involved as a third party which mediates between the client and practitioner. This relationship of mediative control is exemplified in the case of a social worker: the client is the individual or family in need of support of some kind, to be provided by the professional social worker. Precisely what can and cannot be provided in the way of assistance is set out by the state and both parties must recognise this and abide by it Their relationship is overseen by the state which prescribes the manner in which the professional is to work and the rights which individuals have to be assisted by such professionals. This arrangement is common to all state professionals including teachers, health visitors and the medical professionals employed within state health services such as the British NHS. Although these professionals are employees in the same way as corporate professionals, their employers are not their clients. Their situation is neither one of patronage nor collegiate control.

Johnson's typology offers a starting point for discussing what sort of profession contemporary accountancy is. In his view it is subject to corporate patronage, with a large proportion of accountants actually being employed in corporations while many independent firms carrying out auditing services are becoming increasingly dependent on a few large clients (Johnson, 1972, p.66). Industry, business and commerce certainly account for the greatest proportion of qualified accountants but in recent years a growing number have been employed in the public sector as it has expanded. The majority of these perform the same sort of work as their colleagues in the private sector. They are not state professionals in the sense that teachers or social workers are since they do not have relationships with clients which need to be mediated. For this reason they too can be designated corporate professionals who are subject to the patronage of their public sector employers. This still leaves those accountants who are engaged in public practice—should they also be designated as corporate professionals? Sole practitioners and partners in small public practice accounting firms have clients, are available for consultation on the same basis as lawyers or doctors in private practice and have similar power to control their relationships with their clients. While auditing is a major element of their work, and as a result may give rise to a situation which might formally be identified as patronage, in most cases it is likely that the practitioner controls the performance of this and the various other accounting services to clients. For these reasons collegiate control is still very evident in the public practice. This type of (chartered) accountant may not have quite the same status as doctors or lawyers but in the public's view it still ranks as a highly desirable occupation. The position of accountants working in the larger accounting firms is, however, less clearcut. While sole practitioners and partners in any public practice are involved in a traditional form of relationship with their clients, the individual accountants who carry out the work in larger practices do not have clients as such. Since they work for the firm they are in a situation little different to their counterparts in the public and private sectors, being identifiable as corporate professionals. However, they are corporate professionals who work in environments in which collegiate control is also strongly evident In the following chapters these accounting roles and work experiences are subjected to much greater analysis.

The profession as a whole has long practised credentialism as an exclusionary social closure strategy. At the level of the profession as a whole there is a long history of protracted training periods, high examination standards, equally high failure rates and a steady turnover of aspiring accountants. There have been suggestions of the professional associations operating a quota system to restrict numbers and to retain for members their high levels of reward and attractive career prospects. There is certainly a shortage of accountants in the UK at the present time but rates of qualification do not appear to be increasing although the numbers involved certainly are. However, for much accounting work outside of public practice there is no reason why an individual must be qualified. This might be expected to give rise to an attack on the restrictive practices of the profession but only does so in a minimal way. Qualified senior accountants are still very unlikely to offer opportunities to individuals who are not qualified or in the process of qualification. To do so would be to commit a form of professional suicide. Alternatively, companies could choose not to employ any qualified accountants and avoid having to pay out high salaries to such people. For some reason few opt to do so, seeming to accept that a formally trained accou...

Table of contents

• Front Cover
• Sociological perspectives on modern accountancy
• Title Page
• Copyright
• Dedication
• Contents
• Acknowledgements
• Introduction
• Part I The sociology of accountancy
• Part II Sociology for accountancy
• Bibliography
• Name Index
• Subject Index