ICAEW 125th anniversary - Talking 'bout my generation

Introducing our ICAEW 125th anniversary special report, Alice Nixon talks to three families of accountants about how times have changed in the profession.

Ian and Mark Spofforth

Mark Spofforth, chairman of the ICAEW council, qualified in 1982 and, like most of his relations, went on to join the family firm, Spofforths.

His uncle, Ian Spofforth, qualified in 1962 and retired in 2003.

How do your experiences of training and qualifying compare?

Ian: When I was an articled clerk, as we were called, training was five years minimum. That was it, mate. I was at what was then Cooper Brothers - I joined the very day Mr Lybrand arrived, 1 January 1959. I was 21, having been in the Army first for two and a half years. I had an intermediate exam after two and a half years and a final after five years.

I was paid £250 a year while training, and just missed having to pay a premium; when I qualified I went to Iran and was paid £2,000 a year as it was a special posting.

Mark: When I trained, we had graduate conversion and then two other exams after that. You could get exemptions from quite a lot of the subjects of graduate conversion if you'd done them at university. So I guess to a certain extent, university for three years covered a lot of the statistics or economics etc, but your degree had to be passed as having the right content. I remember they didn't pass my statistics syllabus at university so I had to do it all over again.

It's difficult, not having done both training systems, to see how they managed to squeeze the five years' training of Ian's day into three. I suppose a lot of it's to do with experience on the job, as it were, and how much you learn from that.

I was 22 when I started my training. My pay was £3,000 plus luncheon vouchers.

Ian: Oh, we got 3/- luncheon vouchers and it bought you lunch and a pint of beer.

Mark: It was still 15p a day when I started - because that was the maximum you could get tax free. You had to save them up every month to buy a sandwich.

I was on £10,000 a year once I qualified.

How has the office routine altered during your careers?

Ian: I used to wear a bowler hat in the City. Everybody did.

Mark: That had all finished by the time I came along. Although there was still the story in Coopers at the time that nobody was allowed to have a beard.

Ian: Oh no. A beard was seen as a sign of untrustworthiness.

Mark: The first audit that I went on was Glaxo, and there was a woman who came in as a compoperator. I remember being amazed at the machine that had to be delivered, and she sat there all day checking the additions on a computer print-out.

Ian: And the hand-cranked calculators! You had to crank the handles to work them.

Mark: I was the generation that had just got the Sinclair ZX81 at university.

Now I'm walking around with a mobile phone in my top pocket, a Blackberry in my side pocket and a palm-top computer in my briefcase as well. It's incredible - computers have changed things an awful lot. Before, the process of typing and calling over would have added a few extra days to the whole process, whereas now you just adjust on-screen and press the button to print.

Ian: When I became a partner there were no fixed assets in accountancy - none whatsoever. You rented your office, you kept your cars off-balance sheet and you had old pre-war office furniture valued to £1. Then machines, computers, came along and suddenly you found you'd got £100,000 on the balance sheet in fixed assets. And you did the jobs quicker and you stuck with timesheets - and your profits went down and down, because you were writing off £30,000 - 30% of your computer cost - every year, and it wasn't in your chargeable time. You were doing it quicker, charging less and it was costing more. Now we have £0.5m of fixed assets in machinery alone; 40 years ago we had £1. It was a long time before people realised the cost of fixed assets.

Have office hours changed?

Ian: The office hours when I came down to the Worthing office were 9am to 5.30pm with an hour and a quarter for lunch - because people used to go home for lunch. We also worked until 1 o'clock on Saturdays. That stopped when the banks closed on Saturday mornings in the 1970s, although that didn't stop us going into the office, of course.

Partners were required to get in 2,000 chargeable hours a year then - which is much more than they get in now.

Mark: The average target we have now at Spofforths is 1,200 and that's high for a lot of firms.

Ian: And there was a great deal less non-chargeable hours back in those days. We did 40 hours a week and had two weeks' holiday a year.

Mark: By the time I joined the firm, we were up to four weeks' holiday.

But it's different because I reckon I probably do a 60-hour week - and I think most partners probably do about 12 hours a day. But then you have five or six weeks' holiday so you have much longer breaks and work much harder for shorter periods. I think it's better that way - as long as you do take the time out.

How has the role of accountants changed?

Ian: The role of accountants has become tougher, broader, and more specialised.

If you were working in the provinces, you became a general practitioner and hoped you knew all the specialists to refer to. And as a result, you were the trusted family friend of the client. We acted for five generations of some families and they wouldn't go anywhere else because of our background knowledge of them.

Mark: I think there's probably been a pendulum swing backwards and forwards, in that my grandfather was probably much more of an adviser. When I was training it was very much setting accounts, spending all your time doing the technical bits of getting accounts together; and now it's moving back the other way to becoming much more of a business adviser again. I think it will go more specialist in the future. Specialisation has changed dramatically.

I don't think there are many firms now that don't organise themselves in tax departments, accounts departments etc - which is both a bad thing and a good thing. Things are process driven rather than people driven.

You've got polarisation as well - a much smaller number of very, very big firms and lots of sole practitioners. I think before there were probably more middle-sized firms in the old days than there are now.

Helen Phillips and Natasha Higman

Helen Phillips, president of the UK200 Group, qualified as a chartered accountant in 1969. She compares her experiences with her goddaughter, Natasha Higman, operations manager at Prudential, who qualified with the ACCA at KPMG in 1998.

How do your experiences of training and qualifying compare?

Helen: I joined a small practice, where I began by making the coffee because I was the only woman. We worked Saturday mornings, and called everybody 'sir'. I started at 18, and qualified after four years. We did almost all our training on the job and through correspondence courses.

We did crash courses through Financial Training, which had just set up, just before the exams. Only one woman had begun her training at my firm before me but she didn't complete it.

Natasha: I trained with KPMG in London. The top 25% of students went on full-time courses, with more time in college; everyone else had to do their training by link courses, where a lot of it was home study and then a crash course.

The male-female ratio of students was pretty much 50:50.

Helen: My first pay packet was about £2 a month with luncheon vouchers; I was one of the very first people who didn't have to pay a premium. When I qualified my pay rose to £1,250 per annum.

Natasha: I started on £14,000 a year as a trainee. There was quite a pay hike at the time I qualified because before that overtime could be taken as paid and the firm bought everyone out of that.

Is it easier for women in the profession now?

Helen: I think it's much easier for women to get into the profession now, and to get up the profession as far as they want to go. Yes, there's always a glass ceiling, because women often take time off to have kids and do other things. But if a woman's very determined and wants to get to the very top, nowadays there's very little to stop her - whereas 40 years ago it wasn't done, and a lot of women had to leave work when they got married.

Natasha: There's greater recognition that women can do all sorts of things now. When a manager of mine got pregnant in the early 1990s, her boss assumed she'd want to move into tax - because tax, with its more predictable working hours, was where all the women went. I don't think there are the same assumptions now.

How has the office routine changed?

Helen: When I started, there was one adding machine in the office which the tax partner had, and that was it. Everything was typed on a Gestetner, and everything had to be called over. It was very, very labour intensive.

Nowadays we think nothing of emailing, and we don't bother to double check the adds on things because computers do it more quickly and efficiently.

The number of people needed to get through the volume of work has reduced, and I suspect as a result accountants have become more cerebral. If the machines can do all the routine, you spend much more time thinking through different tax positions etc.

Natasha: I find if I go out for a meal, the people I'm with expect me to work out the bill, and I can't do mental arithmetic to save my life!

Nowadays you don't actually need to be a numbers person to be a good accountant - whereas I think possibly in the past that might have been more necessary.

How have time pressures and work-life balance changed?

Helen: Red tape has over the last 30 years increased so time pressures have become much more important. Accountants have to respond to that.

My perception is that it wasn't quite as urgent all those years ago, and there definitely was much, much less legislation.

But it's probably easier nowadays to discuss work-life balance than it was 30-odd years ago.

Christopher Bostock

Christopher Bostock, born in 1923, qualified as a chartered accountant in 1951 at Annan Dexter & Co, where his father Geoffrey (1880-1961) and his brother Edward, born 1908 and qualified in 1934, also worked.

When Christopher Bostock began his training in 1949, aged 25, the required dress was black coats and striped trousers with white shirt and stiff collar. Staff were required to sign in on arrival, with a line drawn to signify lateness after 9.15am.

Unlike his father, who is believed to have become an articled clerk after leaving school at 16, Christopher served in the war and obtained an Oxford degree before beginning his accountancy training. He qualified in two years with the help of Foulkes Lynch, a major supplier of correspondence courses, but was disgruntled to find he was not allowed to take up membership with the ICAEW until his full three years of articles were up.

Christopher was one of the first articled clerks to actually be paid; his father and older brother would have had to have paid the firm a premium for their training instead. He received a wage of 25/- a week, which later rose to 30/- to 35/- a week once he was qualified. When he became an equity partner in 1952, Christopher put in £2,500 of capital and in his first full year, received profits of £1,348.

Each partner was expected to devote 10% of their time to non-fee-earning work. His father became chairman of the Royal Free Hospital, and others set their sights on the ICAEW presidency or local mayoralty.

The mechanics

Two comptometer operators did much of the arithmetical checking, 'although ordinary clerks were expected to be adept and confident in adding up and cross-casting sheets of analysed figures', and an add-listing machine arrived quite soon.

'There were no other machines when I first arrived, but by 1950 we all knew about typewriter-based accounting machines, punched card systems and the existence of the first computers - rare and prodigiously expensive systems.'

A negligence case involving the firm during the 1920s - when Christopher's father Geoffrey was a partner - concerned whether AD & Co had been acting as an auditor or just an accountant.

'AD & Co won the case (Apfel v Annan Dexter) but the evidence in it made the firm adopt rigid rules on the retention of documents, the careful designation of the nature of jobs in daily diaries kept by staff and the logging of all incoming and outgoing mail.'

Christopher explains: 'These arrangements involved the copying of all outgoing mail by enclosing originals in a book with special typewriter ribbons which was put in a press with a damp cloth over the page - a laborious process.'

The offence of advertising

In 1958, Christopher was shocked to find himself publicly reprimanded by the ICAEW for the offence of advertising after The Sunday Times admired his efforts in the then-rare world of management consultancy. Six months later, he faced charges before the Disciplinary Committee for advertising - 'in that we had allowed a firm of ACAs to be named in a public document as managing director of a company providing bookkeeping services in competition with ordinary firms of ACAs'.

Christopher went on to pursue a successful career in management, but the profession's attitude towards advertising U-turned not long after.

'Three or four years later the then president Kenneth Sharpe publicly thanked me for helping to bring the institute to its senses,' he remembers.

'Did I ever regret becoming a member of the institute? No, because it provided the only, though inadequate, preparation for management at the time and my professional qualification probably made it easier for me to gain employment on the several occasions when I needed jobs,' he says.

'And actually double entry is quite an important management tool.'

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