Do brand names and designations matter? The proponents of the proposed integration of the Institute of Chartered Accountants in England and Wales (ICAEW), the Chartered Institute of Public Finance and Accountancy (CIPFA) and, possibly, the Chartered Institute of Management Accountants) (CIMA) certainly think so.
They are right. Brands are the means by which professionals distinguish the services they provide from those of competitors. Laypersons lack the skills to assess the quality of the specialized services they are buying and can benefit from the reassurance of an established brand backed up by a recognized professional body. Retention of the existing brands makes good sense. Calling the integrated body the Institute of Chartered Accountants is more controversial, since it will not include members of the Scottish and Irish Institutes or, indeed, the many chartered institutes overseas.
Accountancy brands are of global not just national importance: partly because UK bodies (including also, of course, the Association of Chartered Certified Accountants, the ACCA), have members across the globe, but also because the 'chartered' designation has long ceased to be restricted to the British Isles. Since its invention in Scotland in the early 1850s the 'chartered accountant' designation has grown into one of the most successful professional brands in the world. As the table shows there are now chartered accountancy institutes, some very large, some rather small, in no less than 22 countries (see box).
Countries are listed in the table in chronological order of the first assumption of the chartered accountant name and/or designation. The earliest accountancy bodies were founded in the second half of the nineteenth century in Scotland and in England and Wales. They were followed by the Canadian provinces, Australia, South Africa and Zimbabwe (then known as Southern Rhodesia). All were settler colonies with, at the time of formation of the chartered bodies, a high degree of self-government.The Empire strikes back
The spread of chartered accountancy was obviously linked to membership of the British Commonwealth and Empire, but the strength of the brand was such that it survived in countries that became republics or even left the Commonwealth altogether. The Institute of Chartered Accountants in Ireland, a body formed by royal charter in 1888 when the whole of Ireland was part of the UK, survives as one body with members in both Northern Ireland and the Republic of Ireland. The granting of independence to India in 1947 as a republic within the Commonwealth was quickly followed by the creation of the Institute of Chartered Accountants in India two years later. Sri Lanka, Pakistan and Bangladesh followed suit rather more slowly.
The chartered accountants of South Africa survived a long absence from the Commonwealth from 1961 to 1994.
As decolonization accelerated from the 1960s onwards, institutes of chartered accountants were set up by legislation in newly independent states in Africa (Ghana, Nigeria, Cameroon, Sierra Leone and Namibia) and in the West Indies (Jamaica, Trinidad and Tobago, Bahamas, Barbados and Guyana).
The triumph of the chartered accountant brand in the English speaking world might seem complete, but, of course, the story is more complicated than that, for at least five reasons.
First, the supremacy of the Scottish, English and Irish Institutes was challenged by incorporated accountants, certified accountants, management accountants and public finance accountants. The incorporated accountants merged with the chartered institutes in 1957. Eventually the three other bodies obtained their own charters and the right of their members to call themselves 'chartered'.
Secondly, although British chartered accountants played a prominent part in the establishment of an accountancy profession in the United States, the chartered brand was never established there. Instead, the leading accountancy designation became certified public accountant (CPA), first used in New York State in 1896. As the American economy grew so did the CPA profession, and by about 1950 the American Institute of Certified Public Accountants (AICPA) overtook the ICAEW to become, as it still remains, the largest accountancy body in the world. Much more recently, the Chinese Institute of Certified Public Accountants (CICPA) has become the second largest body and in the English language version of its name has adopted the US rather than the UK brand, as did the Hong Kong Society of Certified Public Accountants in 2004.The fourth largest body in the world, the Australian Society of Accountants, changed its name to Australian Society of Certified Practising Accountants in 1990 and to CPA Australia in 2000. There are now more CPAs worldwide than CAs.
Thirdly, although their members are to be found throughout the world, the original UK chartered accountancy institutes have never attempted to recruit members outside the UK and Ireland. Other UK bodies, notably the ACCA and CIMA, have pursued quite different strategies and have very large numbers of non-UK citizens in their memberships. At independence, most former UK non-settler colonies in Africa and the West Indies had two sorts of professionally qualified accountants: chartered accountants who were mainly expatriate, and certified accountants who were mainly locals. Together they provided the founding memberships of the local Institutes of Chartered Accountants. Many of the members of these new bodies are also members of the ACCA.
Fourthly, whereas the advertisements and websites of national and local firms typically emphasize the chartered or the CPA brand, the large international accounting firms have outgrown their national professions and developed their own brand names within a global economy. They have also come to regard themselves as suppliers of business services rather than just accounting and auditing services. In the global economy the brand names of these firms have perhaps become better known than the brand names of accountancy bodies. In their advertisements and on the home pages of their websites, international accounting firms typically do not refer to themselves as chartered accountants or CPAs. Neither brand is regarded as sufficiently global. Rather the brand name is that of the firm, although how shaky that can be was shown by the demise of Andersen.
Fifthly, UK accountancy bodies are surprisingly reluctant to use brand names in the titles of their professional journals. Not one journal contains the word 'chartered' in its name, although ICAS's journal changed its name from The Accountant's Magazine to CA Magazine (not to be confused with the Canadian CAmagazine) in 1993. CIPFA not only failed to add the word 'chartered' to the title of its journal but also dropped the word 'accountancy', changing from Public Finance and Accountancy to Public Finance in October 1993 (i.e. before members became chartered public finance accountants). The ACCA changed the title of its journal in 1998 from Certified Accountant' not to Chartered Certified Accountant but to Accounting and Business.
Bob Parker, FCA, is emeritus professor of accounting at the University of Exeter and co-author of
England and Wales (1880)**
Australia (1928) South Africa (1928) Zimbabwe (1928)
Sri Lanka (1959)
Jamaica (1965)* Nigeria (1965)
New Zealand (1966)
Trinidad & Tobago (1970)*
Barbados (1974)* Guyana (1974)*
Sierra Leone (1988)*
N.B. Date in round brackets is date of first assumption of chartered name and/or designation. In Canada members of the Canadian Institute of Chartered Accountants are also members of provincial institutes.
**membership more than 60,000. *membership less than 1,000.