Helen Yee
THE CONCEPT OF PROFESSION: A HISTORICAL
PERSPECTIVE BASED ON THE ACCOUNTING
PROFESSION IN
Accounting History International Conference 2001
Submission
Helen Yee
FACULTY OF BUSINESS AND LAW
Tel: +61 3 5227 2732
Fax: +61 3 5227 2151
Email: [email protected]
THE CONCEPT OF PROFESSION: A HISTORICAL
PERSPECTIVE BASED ON THE ACCOUNTING
PROFESSION IN
ABSTRACT
Sociologists have been struggling to concur on a single definition
that can encapsulate the notion of a profession. This paper gives an overview
of the definitional problem on the concept of profession and offers a further
understanding of this concept by adopting a historical perspective. The
accounting profession in
Introduction
Numerous studies have investigated the sociology of professions and theories of professionalisation. However, consensus has not been reached on how a profession should be 828o1419i defined.
Competing theories have defined the concept of profession and each has a different perspective. As
Barber (1963, p. 671) noted: Theoretical and methodological consensus is not yet so great among sociologists that there is any absolute agreement on the definition of "the professions".
Dingwall (1976) also commented that the concept of profession is 'a concept which is notorious for the diversity of its definitions and usage by sociologists'(p. 331), and that it is a fruitless exercise to define profession (p. 335). The definitional problem is, according to Freidson (1983),
"created by attempting to treat profession as if it were a generic concept rather than a changing historic concept, with particular roots in an industrial nation strongly influenced by Anglo-American institutions" (p. 22). Freidson went on to conclude that: The concrete, historical character of the concept and the many perspectives from which it can legitimately be viewed and from which sense can be made of it, preclude the hope of any widely-accepted definition of general
analytic value (p.35).
Two points are of significance. First, the concept of profession is a changing historic concept which, to a certain extent, reflects the values of the society of the time. Second, most of the theoretical literature on the sociology of professions is based on industrial nations strongly influenced by Anglo-American institutions. Lacking in the literature on the sociology of professions are contributions adopting a non-Western perspective. This latter point raises an
important question as to whether the concept of profession is a product of capitalism.
This paper attempts to address the comment made by Freidson. The purpose of the paper is to examine the concept of profession, not by attempting to find a definition, but by offering an alternative perspective to further the understanding of the notion of a 'profession'. A historical approach will be adopted, taking into account the interplay of the various forces within the social, economic and political environment.
For this purpose, the accounting profession in
collated from secondary sources, are identified and examined for interconnectedness.
The paper will begin by reviewing the sociologist's approach to the understanding of the concept of profession. The problems of such approach will be highlighted in the following section and the
reasons for adopting the historical perspective as an alternative
approach will be discussed. Justifications for using the Chinese accounting
profession as a case study are considered in the next section. This is then followed
by a historical examination of the establishment and the development of the
accounting profession in
The final section of the paper contains discussions of the implications of this research and the conclusion.
Understanding the concept of a profession - the attribute approach
Medicine, law and ministry are considered traditional professions in most Western societies.
Today, many more occupational groups are assuming, at least in rudimentary form, some of the characteristics commonly attributed to these traditional professions (Vollmer & Mills, 1966, p. 2). A number of these occupations succeeded in their pursuit of professional status, while others are still working towards
achieving that status. In his work The Professionalization of Everyone?, Wilensky (1964, pp. 137-138) noted: Many occupations engage in heroic struggles for professional identification; few make the grade. Yet there is a recurrent idea among students of occupations that the labor force as a whole is in one way or another becoming professionalized.
In a worthy effort to uncover similarities among all occupations, many sociologists have succumbed to the common tendency to label as "professionalization" what is happening to real
estate dealers (realtors) and laboratory technicians (medical technologists). Personal service functionaries like barbers, bellboys, bootblacks, and taxi drivers, it appears, are also "easily professionalized".
Wilensky questioned how a profession should be 828o1419i defined, '[w]hat are the differences between doctors and carpenters, lawyers and autoworkers, that make us speak of one as professional and deny the label to the other?' (1964, p. 138). A number of contrasting frameworks had been put forward over the years, attempting to provide an understanding of the concept of profession. The approach which dominated research in the sociology of profession up until the late 1960s took on the perspective that a check-list of particular attributes could be applied to distinguish the professional from the non-professional occupation. This approach, labelled as the 'taxonomic approach' by Klegon (1978), rests on the belief that (1) professions possess some unique characteristics which set them apart from the non-professions; and (2) professions play a positive and important role in the division of labour in society (Saks, 1983, p. 2). Becker (1962, p. 27) recognised the taxonomic approach to be originated from a paper written by Abraham Flexner (1915), Is Social Work a Profession?. Flexner
(1915) in Becker (1962, pp. 27-28) set out six criteria to distinguish professions from other kinds of occupation:
. professional activity was basically intellectual, carrying with it great personal responsibility; it was learned, being based on great knowledge and not merely routine; it was practical, rather than academic or theoretic; its technique could be taught, this being the basis of professional education; it was strongly organized internally; and it was motivated by altruism, the professional viewing themselves as working for some aspect of the good of society.
Using these criteria, Flexner (in Becker 1962, p. 28) reached the following conclusion regarding certain occupations:
. medicine, law, engineering, literature, painting, and music were definitely professions, but that plumbing was not a profession, being unintellectual and having no social end.
Banking had insufficient science and too much profit motive. Pharmacy had no primary responsibility, but only carried out the physician's orders. Social work had no technique of its own, and only mediated between people with problems and those who could help them.
Flexner appeared to be very decisive with his analysis and conclusion, yet he ended with a drastic
qualification of his objective criteria (in Becker, 1962, p. 28):
What matters most is professional spirit. All activities may be prosecuted in the genuine professional spirit. In so far as accepted professions are prosecuted at a mercenary or selfish level, law and medicine are ethically no better than trades. In so far as trades are honestly carried on, they tend to rise toward the professional level . The unselfish devotion of those who have chosen to give themselves to making the world a fitter place to live in can fill social work with the professional spirit and thus to some extent lift it above all the
distinctions which I have been at such pains to make.
Flexner's (1915) paper set the trend of research in the sociology of professions area, and a lot of work had been done subsequently by sociologists on identifying the unique attributes that distinguish professions from the lesser occupations.
According to Saks (1983, p.2), there are two variants of the taxonomic approach to the profession,
namely the trait and the functionalist models. The former centres on the formulation of a list of
attributes which represents the core features of professional occupations, whereas the latter concentrates on those attributes that are felt to be of functional relevance for both the society as a whole and for the professional-client relationship. Under the functionalist approach, distinctive attributes such as possession of esoteric knowledge, independence, altruism and self-discipline are emphasised and are largely unquestioned (Willmont, 1986, p. 557).
Among those who adopted this attribute or taxonomic approach was Ernest Greenwood (1957). His work, Attributes of a Profession, was repeatedly referred to by researchers in the sociology area.
With respect to each of the above attributes, the true difference between a professional and a
nonprofessional occupation is not a qualitative but a quantitative one. Strictly speaking,
these attributes are not the exclusive monopoly of the professions; nonprofessional occupations
also possess them, but to a lesser degree.
Such view was echoed by Bernard Barber (1963), another classic exponent of the functionalist approach. Barber (1963, p.672) suggested that professionalism is a matter of degree. In regard to professional behaviour, he believed that it might be defined in terms of four essential attributes, including:
a high degree of generalized and systematic knowledge; primary orientation to the community interest rather than to individual self-interest; a high degree of self-control of behavior through codes of ethics internalized in the process of work socialization and through voluntary associations organized and operated by the work specialists themselves; and a system of rewards (monetary and honorary) that is primarily a set of symbols of work achievement and thus ends in themselves, not means to some end of individual self-interest.
According to Barber (1963, p. 673), These four essential attributes define a scale of professionalism, a way of measuring the extent to which it is present in different forms of occupational performance. The most professional behavior would be that which realizes all four attributes in the fullest possible manner.
Similarly, Moore (1976, pp. 5-6) offered yet another set of defining characteristics, namely (1) full-time occupation; (2) commitment to a calling; (3) identified with their peers-often in formalized organization; (4) possession of esoteric but useful knowledge and skills, based on specialized training or education of exceptional duration and perhaps of exceptional difficulty; (5) service orientation; and (6) autonomy.
Various other researchers offered their list of characteristics to distinguish a profession from the
nonprofessions. Millerson (1964) performed an analysis of characteristics put forward by a number of researchers and identified six essential features of profession:
(a) A profession involves a skill based on theoretical knowledge.
(b) The skill requires training and education.
(c) The professional must demonstrate competence by passing a test.
(d) Integrity is maintained by adherence to a code of conduct.
(e) The service is for the public good.
(f) The profession is organized.
Millerson (1964), however, argued that such attempts to define professions may be biased and did not take into account the dynamic situation facing the professions (p. 6):
Constantly underlying definitions, there are various sentiments. For example, the professional is a noble, independent individual who places public duty and honour before all else. But neither the characteristics presented, nor the sentiments commonly supporting them, allow a realistic assessment of the professional situation. While some characteristics seem reasonable and realistic,
others appear restrictive. Must a profession be organized? Must a professional pass an examination to show competence? Is a code of professional conduct always necessary to enforce integrity? Do professionals always operate a valuable public service? How many professionals are actually independent practitioners?
Millerson's (1964) analysis included definitions from twenty-one researchers. Amongst them are
Bowen (1955), Carr-Saunders & Wilson (1933), Christie (1922), Cogan (1953), Crew (1942), Drinker (1953),
Flexner (1915),
Marshall (1939), Milne (1959), Parsons (1954), Ross (1938), Simon (1951), Tawney (1922),Webbs (1917),
Whitehead (1948), Wickenden (1952). Full reference to sources can be found in Millerson (1964).
The dynamics of professionalisation
The assumption underlying the attribute approach is the ability to develop criteria determined by general consensus and use it to recognise a profession in a relatively clear and unproblematic manner (Dingwall, 1976, pp. 331-332). However, no such consensus has been reached. According to Freidson (1983, p. 21),'[n]o small part of the criticism of the traditional literature on the professions has been devoted to pointing out a lack of consensus'. This problem of application is echoed by Klegon (1978). In his work, Klegon (p. 260) commented:
. the main thrust of the studies of the professions by American sociologists has been the elaboration of definitional criteria by which professions can be distinguished from nonprofessions. For that approach to be viable, theorists should be able to delineate a consistent set of traits of professions, and then be able to apply the traits with limited ambiguity. However, neither has been true of the taxonomic approach toward professions.
There has been a great deal of inconsistency and differing terminology in the various lists of attributes which have been put forth as defining professions, and the attributes which are put forth are difficult to apply to concrete occupations.
This led Dingwall (1976) to conclude that '[t]he logical outcome of this [attribute] approach is that a profession is nothing more or less than what some sociologists say it is' (p. 332).
Roth (1974) was particularly critical of
and autonomy' (p. 7). Roth contended that 'sociologists using this approach see their job as listing the criteria for, attributes of, or characteristics of, a profession' (p. 7), and it 'decoyed students of occupations into becoming apologists for the professionalism ideology, justifying the professionals' control over their work situation' (p. 6). He further pointed out that (p. 17):
The trouble with the attribute approach is that it does not focus on this process [of professionalisation], but on its product, and typically even this focus is contaminated with the ideology and hopes of professional groups rather than an independent assessment of what they achieve.
Roth (1974, p. 18) went on to conclude that: . a historical approach to the development of occupations is the best antidote for the attribute rut. If we can see in some detail how present-day professions developed, we would be less inclined to conjure up a vision of a list of characteristics toward which certain lines of work are moving and see it rather as a long-term process of negotiation. Indeed, any professional occupation is inextricably linked to the kind of society in which it exists-to its political and economic environments, its social structure, as well as its cultural norms. All these constituent parts of a society are undergoing changes continuously. The concept of profession is therefore a changing concept, the understanding of which would require taking a broader perspective than just identifying a check-list of attributes.
An alternative approach to studying professions would require researchers to look at a different set of questions. Rather than finding out what the essential traits of the professions are, and questioning whether
occupation x or y is a profession or not, the significant question becomes 'what are the means by
which an occupational status becomes reified and expanded into wider social significance?' (Jackson, 1970, pp. 12-13). As Vollmer & Mills (1966) put it:
Professionalization does not occur in a vacuum. Like other social processes, it cannot be understood without taking into account certain aspects of the larger society in which it takes place (p. 46).
A historical perspective, taking into account the arrangement of sources of power and the interplay of the various forces within the social, economic and political environment, would allow a better
understanding of how a particular occupational group claims and perpetuates its special status in society.
Klegon (1978, p. 271) suggested that a historical perspective would be useful in explaining the position of particular occupations. He argued that (p. 271): Most cross-sectional studies have tended to explain diversity among professions in terms of varying degrees of progress along the road of professionalization, thereby ignoring ultimate differences in terms of sources of power and
authority. By adopting an historical view it is possible to examine those differences, and thereby facilitate a better understanding of the social meanings of professionalization and the circumstances surrounding the achievement, or lack of achievement, of professional status.
Roth (1974) supported the use of a historical approach to understanding the concept of professions and their relationship with the rest of society. He drew on four studies that looked at the development of a profession from a historical perspective, and explained how each of these studies contributed to the understanding of the concept of profession and professionalism.
Willmott (1986, p. 556) also supported the historical approach and added that:
. the organisation of the profession cannot be adequately understood independently of an
appreciation of the political, economic and legal circumstances that have supported and constrained its development (p. 556).
In the Herbert Spencer Lecture delivered at
Professional associations. have been almost entirely neglected; there has been no study of the historical development of professional association or of the social, economic, and ethical problems involved. This is all the more astonishing inasmuch as the greater skill and responsibility of professional men as compared with members of trade unions render their associations far more
interesting and important.
Indeed, sociologists over the years had concentrated their efforts on looking at the product (i.e. the
attributes) rather than the process of professionalisation. In their attempt to separate professions from non-professions, they took a static view of the taxonomic approach, but had neglected the dynamic realism of the concept of profession. It is, therefore, the object of this paper to contribute to the understanding of the concept of profession by providing a historical perspective of the development of a profession in order to take into account the
dynamics of professionalisation. The specific occupation chosen as the focus of this study is the
accounting profession.
A historical perspective using the accounting
profession in
According to Parker (1981), 'the study of the
development of accounting institutions [professional
associations] serves both intellectual and utilitarian
ends' as it 'emphasizes their changing role and the way
in which accountants have responded to, or been moulded
by, their environment' (p. 287). Historical analysis
of the professionalisation of accountants is supported
by a number of researchers to be the means of
understanding professionalism and the current state of
a profession. For example, Lee (1996) commented that:
. tracing the history of the professionalization
of accountants provides one means of
understanding the current situation in an
appropriate context (p. 168).
In his work, Lee (1995 & 1996) presented a broad
historical review of the creation of the accountancy
profession in the
explain how accountants organised themselves into
professional groups, with particular focus on the
conflicting phenomena of economic self-interest and
public interest. Willmott (1986) also presented a
historical examination of the development of the major
accountancy bodies in the
lamented that little research had been done on studying
the accounting professional associations when
'[a]ccounting plays a central role in the regulation of
economic affairs'.
It is, however, not the intention of this paper to
replicate the work of Lee and Willmott in terms of
providing an account of the development of the
accounting profession in the
(1972) in Freidson (1983, p. 26) commented,
'theoretical literature on the professions is almost
wholly Anglo-American, European reviews and use of the
Anglo-American literature notwithstanding'.
Furthermore, Johnson (1982, p. 190) argued that the
historical characteristics of the British professions,
though regarded in much of the literature as providing
a model of the 'classical' features of the professions
in general, are in fact experiences specific to the
British. In his work, The state and the professions:
peculiarities of the British, Johnson (1982) indirectly
questioned misguided attempts in sociology to derive a
universal, 'natural history' of professionalisation
from the defining 'classical' British experience.
Based on such belief, this study explores the
historical development of a non-Western accounting
profession
The accounting profession in
number of reasons. Firstly,
country with a long history and a unique non-Western
culture. In terms of its political ideology and
economic environment,
the Western world. Secondly, for centuries, the
accounting occupation in
prestigious one. Accountants were discriminated
against in society. In fact, they were 'stipulated by
law to be the lowest social class' (van Hoepan, 1995,
pp. 354-355). Accountants were considered greedy
people who were no different to thieves, and being an
accountant was a shameful occupation (Guo, 1988, p. 7).
The accounting profession never had a chance to develop
because of the public scorn for accounting. However,
the last twenty years has seen an extraordinary
turnaround of this occupation in
revolutionary change in societal values. A historical
examination of the Chinese accounting profession will
shed light on how changes in the socio-economic and
political environments influence the evolving concept
of
a profession in
development of the accounting profession in
constitute a useful contribution to research in
international accounting and in the sociology of
professions on an international level. It provides an
opportunity for Western accountants and professional
bodies to observe how a non-Western social environment
influenced the development of the accounting
profession, and assess whether in future the Chinese
accounting profession will play a similar role as its
Western counterparts. For the purpose of this study,
reference to 'accounting profession' means Certified
Public Accountants.
The next section of the paper will look at the
historical condition under which professionalisation of
the
Chinese accountants occurred.
referred to the process of professionalisation as "the
strategies used to secure higher occupational status"
(p. 5). The adoption of the open door policy in 1978
had not only transformed the Chinese economy, but
created a huge demand for accountants and increased
auditing services. The accounting profession began to
undergo dynamic changes and development.
Phases in the development of the accounting profession
in
The evolution of the accounting profession in
cultural and social environment. The CPA profession
first emerged in 1918, but it had experienced very slow
growth, in particular after the Chinese Communist party
rose to power in 1949. From 1949 to the late 1970s,
the development of the CPA profession suffered further
setbacks. Two major events, the Great Leap Forward
(1958-1962) and the Cultural Revolution (1966-1976),
occurred during this period. The Chinese accountants
were considered intellectuals and belonging to the
bourgeois class, and they suffered both physically and
mentally. The CPA profession was eventually suspended
in 1966. It reappeared in the late 1970s, and began
the process of re-establishment in 1980. From 1986 to
1993, the CPA profession continued to develop steadily.
When the Law of the Certified Public Accountants came
into operation at the beginning of 1994, the CPA
profession formally moved into an era of recognition.
The history of the development of the Chinese
accounting profession can be analysed under five
phases. These include: (1) Emergence and formation
(1918-1948); (2) Suspension and contraction (1949-
1977); (3) Re-establishment (1978-1985); (4) Steady
development (1986-1993) and (5) Recognition (1994-
present). These phases will now be examined.
Emergence and formation (1918-1948)
After the Qing Dynasty was overthrown by a
revolution led by Dr Sun Yat-Sen in 1911, the feudal
economic system began to disintegrate. Foreign
investors came to
the Western world blossomed. Such development
attracted foreign certified public accountants into
Provisional Rules for Accountants (CICPA, 1999, p. 10).
This marked the beginning of the development of the
accounting profession in
Lin, the general accountant of the Bank of China and
the first man to be qualified as a certified public
accountant, opened the first public accounting firm in
accountants was founded in
During the rule of the Kuomingtang government, three
further regulations for accountants were issued which
stipulated the qualification, scope of services,
responsibilities and ethics of a certified public
accountant (Xu, 1995, p. 58). From 1918 to 1947, the
number of certified public accountants (CPAs)
multiplied. The following statistical data demonstrate
the increase in number of the CPAs qualified during
this period.
Table 1: Number of CPAs qualified between 1918 to 1947
Year
Number of CPAs
qualified during
the period
Accumulated
Growth
Source: Xu (1995, p. 58)
Unfortunately, the reform was short-lived and
the
invasion of
fighting the Japanese from 1937 to 1945 (Perkins, 1997,
pp. 28-29). Hence, there was little opportunity for
the Chinese to promote its economic activities, which
retarded the development of accounting and the growth
of
the accounting profession in
Suspension and contraction ( 1949-1977)
The development of the accounting occupational
group in
1977. In 1949, after a long period of civil war, the
Chinese Communist Party rose to power and established
the
People's Republic of
socialist system, the elements of society were
primarily divided into two classes, the working class
and the peasant class. Though intellectuals are part
of
the basic social force in
class by themselves (Lou & Shi, 1987, p. 159).
From 1949 to 1977,
centrally planned economy, and it was very much under
the
influence of the
there was no place for private accounting services.
The accounting occupation was not considered important
and therefore accountants were not looked upon as a
prestigious group. In 1951, the national system of
recognizing and supervising certified public
accountants came to an end (Gao, 1992, p. 15). During
the 1950s, the State carried out socialist reform and
private means of ownership were transformed, step-by-
step, into socialist public ownership. By 1956, the
socialist transformation was basically complete (Xu,
1995, p.59; Wei & Eddie, 1996, p.8). CPA firms
gradually disappeared as they lost their social context
in a socialist public ownership economy (CICPA, 1999,
p. 11; Xu, 1995, p. 59).
In 1958, under the influence of 'leftist' ideas,
the Chinese government launched the Great Leap Forward
movement in an attempt to achieve substantial economic
growth. This campaign, however, was an enormous
disaster for the national economy, and in particular
for the development of accounting. Bai (1988) in Wei
and Eddie (1996, p. 8) commented on the function of
accounting during the time of the Great Leap Forward:
Not only were the functions of accounting
neglected as a result of the deviation from
the principles of scientific management, but
many absurd accounting concepts and practices
were also encouraged and applied. A notable
example was the practice of 'accounting
without books', a reference not to the use of
a computer but to the elimination of
accounting journals and ledgers. Such a
system might work briefly over time, however,
original documents such as invoices,
receipts, and other documents accumulated,
resulting in great confusion and disarray in
accounting departments.
Liu and Turley (1995, p. 205) described the state of
accounting at that time to be very weak with limited
financial records and no financial control. Many
accounting officers were moved into other work as it
was believed that clerical, office or administrative
activities were of less value than practical work.
Naturally, such concept did not encourage the growth
and
development of the accounting profession in
As Kwang (1966) in Wei and Eddie (1996, p. 9)
commented
Drastic simplification of accounting systems
and procedures were made in order to make it
possible for workers in the factories and
peasants in the people's communes to
participate in such work.
Accounting, at that time, was considered a task able to
be performed by the uneducated.
The development of the accounting profession
experienced a short-lived recovery between 1962-1965
when the Chinese started to question and confront the
was re-established and many accounting positions,
eliminated during the time of the Great Leap Forward,
were reinstated (Liu & Turley, 1995, p. 206). During
this period, the Ministry of Finance formulated further
accounting regulations which included the Trial
Regulations on Powers of Accounting Personnel in 1962.
According to Eddie (1988 p. 9), this regulation defined
accounting personnel according to the tasks they
performed, but not on their professional or academic
qualifications
In 1966
Revolution In his work looking at the vanishing
cultural influence on accounting, van Hoepan (1995, p.
363) described this period as 'a period of cultural
retrogression' and that it was 'the most dangerous
expression of discrimination against accountancy in
Chinese modern history'. Because of the ideology of
self-sufficiency,
economy. This had disastrous consequences on the
overall Chinese economy, and in particular on the
development of accounting and the accounting
profession. The Chinese authorities believed that
accounting was unnecessary, and van Hoepan (1995)
described their view at the time:
Some radicals (e.g. the 'Gang of Four') hoped
to build a non-monetary economic system in
system, which took monetary units as the
means of measurement was the shield for the
currency in circulation, and thus it should
be eliminated from all economic activities.
The Gang of Four asserted that, 'even if we
do not perform accounting for ten years,
money (ie resources, or wealth) can never go
to foreign hands.' (p. 363)
Consequently, according to van Hoepan, there was
serious disruption during the Cultural Revolution to
the development of the accounting profession:
During the ten years of the Cultural
Revolution (1966-1976), accounting in all
state and collective enterprises was
terminated, the accounting people were
dismissed, and the accounting departments in
universities were closed. . Propaganda (e.g
movies, drama, and novels) during the
Cultural Revolution denounced accounting
personnel. This not only resulted in public
prejudice against accounting and accounting
personnel but also led to the ruin of
accountants both physically and mentally (pp.
Accounting records were not well kept and there were
less than 100 people working in the Ministry of Finance
(Liu & Turley, 1995, p. 206). Wante and Baldwin (1988)
in Wei and Eddie (1996, p. 11) described the cultural
atmosphere at the time:
By the time of the Great Proletarian Cultural
Revolution (1966-1976), intellectuals had
become one of the primary targets for
revolutionary charges of elitism. Most
academics were humiliated and branded as
reactionary academic authorities because of
their 'inappropriate thinking' and 'bourgeois
attitudes'. Intellectuals came to be known
as the 'stinking ninth category' of class
enemies. Most universities were closed and
faculty members sent to agriculture communes,
factories, or the army and assigned to manual
labour so they could re-develop the proper
attitudes towards physical labour and the
role of working people in their society.
Unfortunately, accountants were among those targeted as
they were considered as belonging to the bourgeois
class. Accounting education at university almost
vanished in these ten years.
Re-establishment (1978-1985)
The Cultural Revolution eventually ended in 1976
with the death of Mao Zedong and the overthrow of the
Gang of Four. This was followed by the rise to power
of Deng Xiaoping. Under the leadership of Deng, the
Chinese Communist Party began to focus on restructuring
the Chinese economy. The first step to the economic
reform was the introduction of the Four Modernisations
program. This reform involved modernising the key
sectors of the economy. In 1978, at the Third Plenary
Session of the Eleventh Central Committee, the Chinese
government determined the strategies for opening to the
outside world. With the adoption of this open door
policy,
investment. For the first time, the Chinese government
took on the concept of a planned commodity economy, and
allowed the market mechanism to play a role in its
economic development (Wei & Eddie, 1996, p. 12). Such
economic reforms had far-reaching consequences on the
role of accounting, and there was increased awareness
of the importance of accounting especially as an aid in
enterprise management. 1978 also marked a turning
point in the history of the accounting profession in
Accounting Staff Authorities Regulation 1978, which
enabled all accounting staff to hold a professional
title (Aiken et al, 1997, p. 52). The government also
issued new laws and regulations that impelled the reestablishment
of the certified public accountant system
(Xu, 1995, p. 60). From then on, the role and
importance of the accounting profession was reasserted.
It is, however, important to understand that the reemergence
of
the accounting profession in
largely the work of the Chinese government. As Hao
(1999, p.293) commented:
Chinese CPAs did not proactively organise
themselves to become a self-regulated body.
Any step forward was directed by state
regulations. It is unlikely that a CPA
association would have emerged at this time
if regulations to constitute it and
supportive market arrangements had not been
established by the state.
Hao (1999, p. 292) also compared the difference
between
In many Western countries the accounting
profession has been promoted by practitioners
and professional associations that are
reasonably autonomous from the state. Even
when the associations entered into
"corporatist" arrangements with the state to
regulate accounting practitioners or
accounting practice, they did so as
autonomous entities. It is important to
understand that in
very different. It is the state which is
bringing public accountants back into the
limelight
Indeed, many important regulations affecting the
development of the accounting profession were
promulgated by the Chinese government between 1980 and
A number of important events took place in 1980.
On 6 January, the Accounting Society of
comprised mainly accounting academics, was reorganised
after having been suspended for a decade because of the
Cultural Revolution. In September, the Standing
Committee of the National People's Congress issued the
Income Tax Law for Sino-foreign Joint Ventures On 14
December, the Ministry of Finance promulgated the
Detailed Principles for Implementation of Income Tax
Law for Sino-foreign Joint Ventures It was stipulated
for the first time that an auditor's report required
for a tax return must be signed by a Chinese CPA (Hao,
1999, p. 292). In the same year, on 23 December, the
Ministry of Finance issued the Provisional Regulations
Concerning the Establishment of Accounting
Consultancies This marked the first step in the reestablishment
of the CPA profession. On 1 January
1981, the first CPA firm to emerge as part of the
revival of the certified public accountants system was
the Shanghai Certified Public Accountants (then called
established in succession in other provinces of
(Hao, 1999, p. 292; Xu, 1995, p.60).
Another major event in the development of
accounting in
enactment of the first Accounting Law by the National
People's Congress, which is the highest legislative
body in
320), accounting in
series of accounting regulations promulgated by the
Ministry of Finance from the early 1950s until 1985.
However, these regulations did not have the 'weight of
law' and consequently, 'many incidents of
administrative authority abuse, financial corruption,
and unqualified personnel assigned to accounting tasks,
went uncorrected', causing substantial losses to the
state. In January 1985, the Chinese government
announced the Accounting Law of the People's Republic
of
the overriding regulatory authority for accounting (Liu
& Turley, 1995, p. 207), it also established the
legality of
the issuance of The Regulations of the People's
Republic of
July 1986 (Skousen et al, 1993, pp. 321-322).
Steady Development (1986-1993)
The promulgation of The Regulations of the
People's Republic of
Accountants (abbreviated to RCPA) was an important
event for the accounting profession in
first time in the history of the development of the
accounting profession, the status of the Chinese CPAs
was legalized. The regulations also delegated the
authority to CPAs to form their own professional body -
the CICPA. Furthermore, it established the academic
requirements for CPAs at a consistent level across the
country (Gao, 1992, p. 15). The RCPA stipulated that
only candidates with higher education degrees and at
least three years practical experience after passing
the uniform examination could obtain a CPA practice
certificate (Wei & Eddie, 1996, p. 25). Skousen et al
(1993, p. 322) provided some details of this
regulation, which included the following points:
(1) Defined CPAs as persons approved by the State to
practise auditing, accounting verification, and
accounting consultancy work (Article 2).
(2) CPAs must be impartial, objective, and responsible
for the accuracy and legality of their reports
(Article 16).
(3) The establishment of public accounting firms with
which CPAs must be associated in order to perform
their work (Article 22).
According to Xu (1995, p. 60), '[t]he issuance of the
RCPA has promoted the certified public accounting
system of the People's Republic of China, and opened up
a new area of accounting theory and practice'. In
summary, 'these provisions stipulated qualifications,
ethics and organisational edicts for CPAs' (Aiken et
al, 1997, p. 46).
The CICPA was eventually established in November
1988 (Mo et al. 1995, p. 288; Wei & Eddie, 1996, p. 27;
Carnegie & Liu, 2000 p. 41), and signified the
completion of the re-establishment of the CPA system in
organisation of CPAs under the jurisdiction of the
Ministry of Finance, and is a body responsible for all
affairs relating to CPAs, including the registration of
CPAs and CPA firms, CPA examinations, liaison with
government agencies, enforcement of self-education and
self-regulation of CPAs and CPA firms (Mo et al, 1995,
p. 289). However, the CICPA remains a quasi-government
agency as it is still supervised and instructed by the
Ministry of Finance and the financial department of the
local governments. According to Macve & Liu (1995) in
Aiken et al (1997, p. 47), these government bodies are
the real 'power behind the throne' and in fact, all
staff members of the CICPA are government officers and
officials. This is unlike the professional bodies in
many other Western nations, and raises the concern
regarding the independence of the Chinese CPAs.
The number of CPAs has been growing steadily since
the foundation of the CICPA. The following data show
the number of public accounting firms with CPAs and
staff from 1986 to 1992:
Table 2: Number of CPAs firms with CPAs and staff between 1986
and
Year Firms CPAs Staff
Source: Xu (1995, p. 61)
* The number of firms includes 955 branches
The table shows that the number of CPAs increased by
ten-fold in a six-year period. Business cooperation
and interchanges with international certified public
accountant firms and foreign accounting associations
had also been greatly improved (Xu, 1995, p. 61).
Under the provisions of the RCPA, the first
uniform CPA examination was held in December 1991. It
was undertaken by more than 23,700 practitioners in
accounting and auditing (Aiken et al, 1997, p. 47).
The second examination was held in October 1993, and
such examination was expected to become an annual event
to ensure a steady increase of entrants into the CPA
profession (Mo et al, 1995, p. 290). The introduction
of the CPA examination was a significant move towards
more professional independence. According to Mo et al
(1995, p. 289), who quoted from the Official Teaching
Guide of the Office of the National Examination Board:
Before the promulgation of the Regulations
(1986), CPAs in
according to experience and educational
background. Candidates could apply to be
evaluated by local regulatory agencies
through their affiliated CPA firms. Owing to
the lack of standardized evaluation criteria,
the granting of CPA qualifications was not
consistently applied throughout different
provinces. Under this certification system,
practically all certified accountants were
retired accounting or financial officers of
government agencies.
In 1993, the Law of the Certified Public
Accountants was promulgated by the Fourth Session of
the Standing Committee of the Eighth National People's
Congress (Aiken et al, 1997, p. 45). This marked a new
era
for the accounting profession in
law expanded the role of the CICPA and stipulated that
CPA qualification was obtainable only by examination.
It also "escorted the CPA profession away from the
state principle and towards becoming a communal
organisation" (Hao, 1999, p. 293).
The accounting profession experienced tremendous
growth during the 1990s. It was pointed out by Xu
(1995, p, 63) that '[t]he reestablishment and recovery
of the certified public accountant system is an
inevitable outcome of transforming the economic system
in
planned commodity economy.' It is also interesting to
note Tanzer's (1991) comment in Winkle et al (1992, p.
Changes in
politicians are moving rapidly from a planned
to a market- and incentive-based economy".
Moreover, "a slow but more or less unimpeded
spread of the capitalist virus to other parts
of
In fact,
and began to transform into a socialist market economy
in 1992. Such transformation continues to bring about
changes to the status and the role of accountants in
Recognition (1994-present)
The Law of the Certified Public Accountants became
operational in January 1994, and in following August,
the government promulgated the Auditing Law of the
People's Republic of
the legality of the Chinese accounting profession and
signified the recognition by the government of the
importance of this profession. The CICPA and the
Chinese Association of Certified Public Auditors
(CACPA) were merged in June 1995. This was a
significant step towards unifying the management of the
Chinese accounting profession.
The CICPA joined the Confederation of Asian and
Pacific Accountants (CAPA) in October 1996, and was
admitted to membership of the International Federation
of Accountants (IFAC) in May 1997 (Carnegie & Liu,
2000, p. 41). In the 15th CAPA Conference (2000) held
in
was elected to be the Deputy President of the CAPA. At
the same Conference, the CICPA successfully bid for
hosting the 16th CAPA Conference to be held in 2003
(CICPA, 2001, p. 8). This paved the way for the CICPA
to enter the International market and is a significant
step towards achieving international recognition.
According to Tang (1999, p.1), as at the end of
1997, there were 6,900 accounting and auditing firms,
62,460 practising CPAs, and 67,715 non-practising CPAs.
The CICPA is the second largest CPA association in the
world, with a membership totalling 130,135. From
available statistics, over 600,000 candidates have
applied to take the CPA examination in 2001 (CICPA,
2001, p. 48), suggesting that becoming an accountant
has become more appealing to the Chinese.
Discussions of implications
The process of professionalisation for the
accounting profession in
interesting one. Unlike the Western accountants, the
Chinese accountants had suffered a great deal, both
physically and mentally, in the history of its
existence. From an occupation with a very low social
status, the profession has gained respect in a
relatively short period. The CPA profession has gained
recognition as a 'profession' internationally upon
joining the Confederation of Asian and Pacific
Accountants in 1996, and becoming a member of the
International Federation of Accountants in 1997.
Some of the changes to the accounting environment
after the open door policy in 1978 were summarised by
van Hoepan (1995, p. 365):
(1) The public gained a new understanding of the
functions of accounting.
(2) The social status of the accounting profession
improved
(3) The state government registered a number of
accounting professionals as CPAs for the first
time since the founding of the PRC.
(4) Accounting firms and agencies were set up and
started to provide accounting services.
(5) Many universities either restored or set up
accounting departments for training and education.
Meanwhile, accounting associations nationwide were
established, and a number of accounting journals
emerged
(6) Top students at universities became eager to
pursue accountancy as a career.
Evidently, the societal values regarding the accounting
profession have changed quite significantly after 1978.
For the first time in the history of the accounting
profession, the Chinese are eager to pursue accountancy
as a career, rather than regarding it as a shameful
occupation
Research suggests that the establishment and the
re-establishment of the accounting profession were
largely the work of the government, driven by economic
development of the country. The CPA profession in
was very much at the whim of the government, and
influenced by changes in culture and political
ideology. Following the open door policy, it was in
the government interest for the CPAs to be perceived as
a 'profession', and every effort was made by the
Chinese government to raise the requirements and to
elevate the status of CPAs. For example, the
government stipulated that before a candidate obtains a
CPA practice certificate, they are required to have a
higher education degree followed by at least three
years practical experience, thus ensuring that the CPAs
are formally educated, knowledgeable and well-trained.
The Chinese government is also keen for the CPA firms
to establish an image of independence. From 1997, the
government carried out reform to re-structure the CPA
firms. According to Tang (1999, p. 3), the goal of the
reform is to disengage the relationship between the CPA
firms and the government agencies that originally
established them in order to guarantee the independence
of the CPAs firms.
So, what are the implications? Different
societies have their different concepts of profession
influenced by their culture, political ideology of the
government and the socio-economic environment.
Furthermore, different groups of occupations would
likely advance different concepts of profession
depending on whether they are seeking the rewards of a
professional label, or attempting to preserve the
rewards they have already won (Freidson, 1983, pp. 27-
28). Different interest groups may also advance their
own conception of profession, each to its own
appreciative audience, in order to seek fulfilment of
their purposes (Freidson, 1983, p. 28). As Roth (1974,
p. 21) discovered through an examination of Friedman's
(1965) work , '[t]he attempt to apply universal
Freidson gave examples of these interest groups. They may be employers or clients seeking to control
the terms, conditions and the content of the jobs they wish done, or they may be government agencies
seeking to create a systematic classification of the occupations in the labour force (p. 28).
Friedman's (1965) work Freedom of contract and occupational licensing 1890-1910: a legal and
social study, as quoted in Roth (1974), gives the perspective of a lawyer on the occupational licensing
in the
criteria . always uncovers numerous exceptions and does
not have general explanatory power. Freidson's (1983)
succinctly summed up the notion of profession:
One does not attempt to determine what
profession is in an absolute sense so much as
how people in a society determine who is a
professional and who is not, how they 'make'
or 'accomplish' professions by their
activities, and what the consequences are for
the way in which they see themselves and
perform their work (p. 27).
This is precisely the lesson that one can gain from the
Chinese experience. The CPAs in
profession in a very different manner compared to their
Western counterparts. However, they still became
recognised as a profession, both nationally and
internationally. A society's perception of a
profession appears very much to be based on the
contexts within that society. One of the contextual
factors in the examination of the historical
development of the accounting profession in
the ready acceptance of norms, as determined by the
'person at the top'. Such norms, being given strong
support from the authorities, become a general
consensus of a critical mass, which in turn underpin
the societal values. To look at the concept of
profession, it seems not relevant to ask the questions
'Is this occupational group a profession?' or 'What
criteria should be used to measured a profession?'.
The concept of profession should be 828o1419i studied as a
historical construction in the particular society in
which it exists, and attempts should not be made to
provide a generalisation of the concept. It is a
profession consists of the promotion of an ideology and the successful use of political power to
legitimate "friendly licensing" in order to protect occupational monopoly from competitors and from
public criticism (p. 20).
changing concept and will only become more meaningful
if studied as individual empirical cases.
Conclusion
This paper has sought to give an overview of the
definitional problem of the concept of profession.
Conventional trait theories have tended to provide a
generalisation of the concept, however there was
lacking of consensus as to the list of criteria used
to recognise a profession. An alternative approach has
been suggested in this study, attempting to understand
the concept from a historical perspective. The
accounting profession in
and an account has been given on how the Chinese
accountants 'accomplish' profession under their
specific economic, social and political environment.
Unlike the
initiation of the Chinese CPAs that the profession
achieved its current status. The development of the
Chinese CPA profession is very much under the dominant
influence of the Chinese government, and it is the
government who enables the Chinese CPAs to become
recognised as a profession. The Chinese experience has
provided valuable insights into the study of the
concept of profession. To be more meaningful, such a
concept needs to be looked at from a broader
perspective, taking into account the various changing
environments and conditions in which a particular
profession exists.
Even though there remain a number of issues that
need to be addressed regarding the professionalism of
the
CPAs in
accounting profession will continue to be regarded
highly by the societies and recognised internationally
as a profession. As West (1996, p. 91) discovered:
While the paths travelled by vocational groups
to achieve professional status may be numerous
and are only partly mapped, there are grounds
for suggesting that they define an essentially
one-way journey.
To the Chinese, it will no longer be considered
shameful to be an accountant.
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