accountancy defined in 1939 yearaccountancy - Accountancy;
accountancy - The keeping, directing, and examining of accounts, as practised by professional accountants. The first traces of the professional keeping of accounts are to be found in Italy. The very complete fabric of state accounting constructed by the Romans was, after the Roman Empire, eventually revived by the communes and free cities therein. Records of the 12th century are known, but it was not until 1581 that the first association of accountants was founded - in Venice. Within 100 years this had become so important that only its. members could act in that state as accountants in connexion with law or public administration.
A college was established in Milan in 1739, approved by the Senate in 1741, and opened in 1745, and a statute of 1744 decided that to obtain membership the candidate should have a knowledge of Latin, commerce, public affairs, economics, and arithmetic, serve a five years' apprenticeship, pass an examination in the science of accounting, and be 25 years of age. Finally, after repeated requests, the state of Milan agreed to appoint to public offices only accountants whoso acquirements could be attested by the college. Later in the century the college was dissolved.
The profession encountered many vicissitudes, but in 1879 a congress held at Rome recommended the formation of associations or colleges of accountants in each province of Italy. This was carried out, some of the colleges growing out of earlier societies in certain towns. By royal decrees in 1885 and 1891 the. sphere of accountants in Italy was defined, and latterly the northern half of that country, where the great commercial centres arc situated, has been a fertile field for the exercise of the profession.
Accountancy In the United KingdomThe initial growth of the profession in the United Kingdom is undoubtedly first traceable in Scotland. In 1773 seven accountants were mentioned in the Directory of Edinburgh as practising in that town, and in 1783 the Directory of Glasgow mentioned six accountants. In 1853 steps were taken in Edinburgh to form a closed body. The Institute of Accountants resulted, and this obtained a royal charter in 1854. A similar royal charter was obtained by the Glasgow Institute of Accountants in 1855, and later Aberdeen followed suit. The three bodies began in 1896 the issue of a directory of Scottish chartered accountants. Admittance to any of these societies can be obtained only after service under articles, after passing three examinations and attendance at. certain university classes.
The first records of practising accountants in England appear about the same time as those in Scotland, as five names are reported in the British Universal Directory of 1790, but it was not until 1870 that steps were taken to organize the profession. Then a society was formed at Liverpool, soon followed by the Institute of Accountants in London, and in 1871 by a society at Manchester. The Society of Accountants in England was formed in 1873, and in 1880 the existing societies were incorporated by royal charter into the Institute of Chartered Accountants of England and Wales.
In 1885 the Society of Incorporated Accountants and Auditors was formed, and in 1891 the Corporation of Accountants in Glasgow. The latter body, with the Institution of Certified Public Accountants (1903) and the London Association of Certified Accountants (1905), now constitutes the Association of Certified and Corporate Accountants. In Ireland a Chartered Institute was formed in 1888, and a Society of Accountants and Auditors in 1900. Other organizations in the U.K. include the Institute of Company Accountants, the Institute of Cost and Works Accountants, the Institute of Municipal Treasurers and Accountants, and the Association of International Accountants. The movement towards organization, initiated in the British Isles, has since spread throughout the British overseas dominions.
The profession does not seem to have developed in the U.S.A. until much later. Its work there is mostly confined to audits and investigations, and differs from that of the United Kingdom in that its members may advertise freely.
New OpeningsAccountants have become more numerous of recent years, but the demand has fully kept up with the supply. The Companies and Bankruptcy Acts have provided profitable openings for accountants as liquidators and trustees. Large firms and companies resort more and more to qualified accountants as the heads of their accounts branches. Manufacturers look to them for their costing, etc. The income tax laws require expert knowledge, and with the high rate of tax now in force numbers of people are calling in skilled accountants. This is an age of specialization, and the "figure-specialist," if he can be so called, is a natural outcome of this tendency, and is supplying a demand that is unlikely ever to cease through excessive supply.
Accountants' charges vary. It is usual to agree a sum for, say, an audit, and not to pay directly according to the time employed. For trustee and liquidation work there is a scale percentage of remuneration.
To become a member of the Institute of Chartered Accountants in England and Wales the beginner must first pass the preliminary examination, or be exempted from it on the ground of holding a certificate of equal standard. Provided he is sixteen years of age, he must then enter into articles of clerkship for five years with a member of the institute in practice in England or Wales. For university graduates the period is only three years. After the expiry of one-half of the term of service the articled clerk can sit for the intermediate examination, which is held in the following subjects: (1) bookkeeping and accounts, including limited companies, partnership, and executorship; (2) auditing; (3) general commercial knowledge. After a further two years he can present himself for the final examination, conducted in the following subjects: (1) and (2) as in the intermediate examination, but on a higher standard; (3)general financial knowledge; (4)company law: (5) law relative to bankruptcy, deeds ofarrangement, etc.; (6) mercantilelaw and law of arbitration andawards. Membership of theinstitute is divided into twoclasses, fellows and associates(F.C.A. and A.C.A.).
A person may also become entitled to the designation of Chartered Accountant by acquiring membership of one of the Scottish chartered bodies or of the Institute of Chartered Accountants in Ireland. The necessary preliminaries are much the same.
Incorporated AccountantsTo become a member of the Society of Incorporated Accountants and Auditors, a preliminary (or educational) examination or one of similar standard must first be passed; then articles of five years' service must be entered into, except in certain cases referred to below. At the expiry of two years the articled clerk can take the intermediate examination, and in his last year the final examination. The subjects of both examinations are similar to those of the Chartered Institute.
Service under articles is not insisted upon in the case of accountant's clerks with nine years' continuous service. They must first pass or obtain exemption from the preliminary examination. They may be allowed to sit for the intermediate after six years' experience, if not less than 22 years' of age, and then for the final after nine years' experience, if not less than 25 years of age. This is a valuable concession, and has been much appreciated by those qualified; it has also been the means of securing many able and highly-skilled accountants.
Fellows are entitled to the letters F.S.A.A. after their names, and associates A.S.A.A. The professional designation is Incorporated Accountant. An associate may be elected to fellowship after completing three years in public practice.
Service under articles is not insisted upon by the Association of Certified and Corporate Accountants. The Association holds three examinations, viz., preliminary, intermediate, and final. Exemption from the preliminary examination may be obtained by those who have secured matriculation or school certificate, or have passed other examinations of equivalent standard. The examinations are similar in subject and scope to those of the other two bodies. The passing of these examinations does not of itself qualify for membership of the Association; a minimum of five years' sound practical accountancy experience is required in addition. The designation of members is Certified Accountant. There are two classes of members, fellows (F.L.A.A.) and associates (A.L.A.A.).
See Bankruptcy; Book-keeping; Company Law.
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