2.
What does it mean to be a professional accountant?

Professions, qualifications, ethics, and ethical dilemmas

Unit learning outcomes

By the end of this unit, you will be able to:

  • explain the evolution of the accountancy profession so that you can appreciate the role of an accountant and how it has developed over time
  • reflect on what it means to be a professional in society
  • recognise the breadth of different professional accountancy bodies and the role they play to maintain the accounting profession
  • distinguish between the main professional accountancy qualifications and reflect on what it takes to become an accountant
  • clarify what is meant by the code of ethics in accounting and what this means for accountants.

2.1 Introduction

Decorative image.

In the complex modern world accountants play a pivotal role as the guardians of accountability for organisations. Beyond their traditional role in financial reporting, accountants are increasingly at the forefront of sustainability initiatives. They help organisations measure their environmental impact, assess their social responsibility, and track their progress towards achieving sustainability goals. By providing the data and insights needed to make informed decisions, accountants empower organisations to create a positive impact on the world around them.

From small businesses to multinational corporations, accountants are the heart and soul of every organisation. Their skills in making decisions, and their professional scepticism and critical thinking are essential to every organisation. As the world becomes increasingly complex and interconnected, the role of accountants is growing in importance.

In this unit we refer to both accounting and accountancy. Accounting is the practical implementation of processes while accountancy is typically used to refer to the profession and encompasses the full range of work undertaken by accountants.

We also refer to accountants in practice and accountants in business. Accountants in practice are those who work in public practice, conducting accounting, auditing, and business advisory work for their clients. In many jurisdictions accountants conducting auditing work also need a separate audit qualification or registration.

Accountants in business typically work in the finance function of an organisation.

Accountants perform tasks such as preparing financial statements, managing budgets, conducting audits, and providing strategic business consultancy advice. They help maintain financial, non-financial and performance integrity, assist in making informed economic, environmental and social decisions, ensure regulatory compliance, and manage financial and non-financial business risks. Their roles have expanded to include data analytics, forensic services, risk management, ESG reporting and more, depending on specialisation. In their tax role they make the world’s tax systems function. The operation of society is, as a result, quite literally dependent on the reporting of accountants.

Case study 2.1 What is it like being an accountant?

Pause to reflect

  • Can you think of some professional attributes that accountants need as members of the accountancy profession?
  • What does it mean to be professional?
  • Can you describe what attracted you to studying accounting and whether you want to become a professional accountant?

2.2 Background, sociology and history of the profession

Professionalisation relies on the formalisation of knowledge, with a requirement for qualifications based on education, examinations and a regulatory body with the power to admit and discipline members.

Sociology of the professions

Industrial Revolution
During the 1800s the UK, the US and several other European economies were marked by a move from a reliance on agriculture to an economy characterised by systematisation of production processes, for example: through factories and mechanisation of tasks. This was accompanied by developments in rail, sea and air transport, thereby facilitating the transportation of goods and people more reliably than in the past. Whilst this period gave rise to many inventions and increased wealth, it was also a period of colonialisation and gave rise to significant social inequalities.

The study of the professions, known as the sociology of the professions, is based on work by Emile Durkheim,1 widely held to be a ‘founding father’ of sociology. His work noted the need in society for social order and considered how individuals organise together to form agreements, social obligations and moral force. Durkheim saw the Industrial Revolution as a destruction of social order with new ways of organising required. He viewed professional organisations with membership, morals and ethics as the beginning, and developing professions as a public good. The initial formation of professions was criticised as being used to maintain power and privilege for certain groups. By the twenty-first century, the role of professions had evolved to address social problems, inequalities and ethical considerations.

Professions and professional bodies continue to evolve and respond to changes in their operating environment. In the accountancy profession some factors that have been driving change include:

  • Boundary erosion: This refers, for example, to who can undertake certain types of work such as sustainability assurance.
  • Internationalisation of standard setting: This task was once performed at a national level and has been moved to the International Accounting Standards Board, reducing the influence of professional bodies where they remain local standard setters.
  • Increased regulatory scrutiny: Increased compliance requirements have often arisen in response to audit failures, for example placing limits on the proportion of non-audit fee income from audit clients, and mandatory audit firm rotation.
  • Internationalisation of business: This has reduced the hold of national professional bodies over the discipline of accounting.
  • Scale of the Big Four: The scale of the largest professional services firms exceeds that of professional bodies, and they often interact directly with government rather than using the professional bodies as conduits.
  • Heterogeneity of members: Members are no longer primarily practitioners and have a diverse range of interests that they expect the professional body to serve.

History of the profession

Historic research has used ideas of social closure and credentialism (an emphasis on formal qualifications) to explain the development of the accounting profession both in the UK (for example, Edwards and Walker, 2007; Carnegie and Edwards, 2001; Gammie, Alison & Matson, 2018) and in other countries (for example, Zelinschi, 2009; Verhoef, 2014; Baskerville, 2006; Yapa, 2006; Sian & Verma 2021). Professional exclusivities and increased professionalism via social closure were achieved by introducing exam-based recruitment systems.

To find out more about the Overend Gurney failure, read this Bank of England description: The demise of Overend Gurney.

While the history of account keeping in society goes back to the dawn of civilisation (see for example, McBride & Verma, 2024, and Atkins et al., 2023), the history of the profession is more recent, with the first professional association of chartered accountants founded in Edinburgh in October 1854,2 closely followed by others. The preceding period had been one of great change brought about by the all-pervasive technological advances of the Industrial Revolution (between 1760 and 1840). The need for responsible accounting and accountants was confirmed by the railway company crash (1848), which led to capital being used to pay dividends, and the Gurney bank collapse (1866).

Early achievements of the profession towards more responsible accounting include the reinforcement of double-entry bookkeeping, developing a separation of capital and revenue, and creating the concept of shareholder funds to indicate solvency. Then in the 1900s, the development of group accounts (becoming consolidated accounts in the UK after the Second World War) which supported globalisation and international taxation. The role of the firms in creating tax havens can also be noted, with avoidance and evasion abuses often related to these.

Historically, along with the rise of the power of the professional accountancy bodies, there has tended to be a reactive approach to change which has typically been caused by audit failure – for example, the Sarbanes-Oxley Act was introduced in the United States in response to the failure of Enron. More recently, there has been an unwillingness to embrace the need for reporting to people other than shareholders, to support country-by-country reporting despite political demand in the EU, and a cautious approach to carbon accounting.

Accounting historians have investigated the social background and class of the accountants who led the development of professional accountancy bodies in the UK.3 The literature shows the social background of members of professional accountancy bodies constructed the conditions of social closure and exclusivity required to deliver the well-qualified chartered accountant4 and further the institutes’ professional project.5 This was because the requirement to have completed secondary education acted as a barrier to entry to all but the more affluent members of society at the time. Added to this, the professional exams and lengthy period of apprenticeship ensured that aspiring accountants were drawn from a narrow section of society at the time.

The result was effectively a class ceiling preventing entry of women and the working class. In the first two decades of the twentieth century, constitutional, socioeconomic and legal arguments were utilised to prevent the entry of women. Despite reforming legislation,6 cultural and social barriers to membership persisted within firms of chartered accountants. Accounting historians consider women and accounting (for example, Virtanen, 2009; Walker, 2008, 2006) and the role of gender within the professional accountancy bodies’ professional project (for example, Kirkham & Loft, 1993; Shackleton, 1999; Haynes, 2017; Hayes & Jacobs, 2017).

Today’s profession seeks to shake off an image of reluctance to change, and exclusivity7 and has made strides toward improving diversity and inclusion. Initiatives to recruit and retain underrepresented groups, especially women and minorities, are becoming more common, with some firms making public commitments to diversity goals, reflecting a broader societal push for workplace equality.8 Furthermore, social and environmental accountability is opening the accounting profession up to future-focussed careers that positively contribute to climate change and a thriving planet9 and is igniting interest from aspiring accountants with a passion to make a difference to society.

Pause to reflect

  • Can you reflect on what led to social closure and why this created an effective monopoly for the accountancy profession performing certain types of work, for example, audit?
  • What was the economic and social result of this monopoly for those in the profession?
  • Think about the stereotypical image of an accountant. Look at the websites of three accounting firms operating in your local area.
  • Do you feel it represents the modern profession?
  • Is credentialism important for the profession? Should the profession be restricted to those who have completed high-level qualifications?

2.3 Professional membership bodies

The accountancy profession is structured and regulated by professional accountancy bodies in many countries around the world. A professional accountancy body is an association of accountants in a particular region. The number of professional bodies varies in different countries and is often linked to their historic origins and scope. While anyone can call themselves an accountant, only members of professional bodies can use specific designations designed to signal their expertise, for example, Chartered Accountant, Certified Public Accountant.

The International Federation of Accountants (IFAC) has an overarching governance role to shape and maintain the education of accountants worldwide. Through the development and promotion of international education standards (IESs), support for continuous professional development, and fostering global collaboration across professional accounting bodies, academic accounting associations and industry, IFAC aim to ensure a level of comparability in both initial professional education and ongoing professional education (sometimes known as continuing professional development or CPD).

As of May 2024, IFAC membership consists of over 180 professional accounting bodies in more than 135 different jurisdictions, with millions of professional accountants across the globe.

Why do we need professional accountancy bodies?

Accountants and accounting professionals are expected to adhere to the highest standards of conduct to maintain the reputation of the profession. Members of professional accountancy bodies must provide a professional service in compliance with relevant laws, regulations, principles, standards and ethical requirements.

This video shows how having a designation with a professional body helps accountants to understand not just the numbers but the story behind those numbers: The case of Adam Savage, CGMA.

  • Professional accountancy bodies support individuals in developing knowledge, skills and competencies required to fulfil their duties with due care and competence. They do so by setting the professional exams that form part of the basis for entry to membership and the annual requirements for continuing professional development to ensure that members remain up to date with their learning.
  • They promote ethical behaviour and sanction those who fall outside of these norms through disciplinary processes, upholding their respective Codes of Ethics.
  • Professional accountancy bodies represent the interests of the profession with the regulators and in the political sphere.
  • In those areas where it is vital that the state and the private sector – as well as individuals – interact, such as on the payment of tax.

Pause to reflect

  • Do you believe that accountants adhere to the highest standards of conduct in their professional work?
  • Can you find examples that support your perspective?
  • Why do you think the profession continues to be associated with high-profile corporate failures, for example, Wirecard, Luckin’ Coffee and Carillion?

Professional accountancy bodies in different settings

The establishment and growth of professional accountancy bodies internationally has been studied by many researchers, who have provided insights into how the national context has influenced the structures and development of the profession, engaging with the relationship of the profession internationally and how this influenced its local structures.10 For example, some professional accountancy bodies sought to grow by making their exams available internationally while, in other jurisdictions, professional bodies grew organically or replicated structures from elsewhere.

Professional accountancy bodies continue to evolve in response to the needs of their membership and the regulatory context. There has also been some consolidation of international professional accountancy bodies. For example, Canadian bodies merged in 2014; the Institute of Chartered Accountants Australia and Chartered Accountants New Zealand merged to form CAANZ in 2014; and the (American Institute of Certified Public Accountants) AICPA and the Chartered Institute of Management Accountants (CIMA) link-up was formalised through the creation of a new body in 2016.

Accountants work and practice around the world. You can download this list of international professional bodies for an overview of some accountancy bodies in different settings including North America, Europe, Africa, Asia and Oceania.

Pause to reflect

  • What professional accountancy bodies operate in your region?
  • Can you identify any differences between them?
  • Why do you think there are so many professional accountancy bodies globally?

2.4 Professional qualifications

Careers in accounting can differ significantly across a diverse range of roles, each offering unique responsibilities and opportunities.

See the World Economic Forum 2023 future jobs information to see the most popular and declining roles as observed in hiring trends (pp. 30–31). Can you see accounting functions playing an important function in some of these emerging roles?

The road to becoming a qualified accountant differs depending upon one’s specialisation and career interests. In general, accountants tend to become qualified through a combination of professional certification and practical work experience. They maintain their knowledge of the profession through continued professional development.

The following video cases illustrate the diverse accounting-related roles and career paths:

All those who are professionally qualified as accountants are required to complete an amount of CPD each year to ensure they are keeping up to date with changes affecting the profession. All professional accounting bodies deliver a diverse programme of CPD. By continually updating their knowledge, skills and capabilities, accountants can navigate the complexities of their profession, adapt to changes and provide valuable insights and services to their clients and organisations.

This video highlights the importance of CPD and how accountants can drive sustainability and contribute to society: The case of Chief Executives of ACCA and Chartered Accountants Australia & New Zealand (CA ANZ).

2.5 Ethics in accounting

The existence of a code of ethics is one of the distinguishing features of a profession. It is important that such codes adapt to the contemporary work environment and support ethical decision-making for professional accountants.

Codes of ethics

The International Ethics Standards Board for Accountants (IESBA) is a global standard setting body that develops ethical standards and guidance for professional accountants. This body is responsible for creating and revising the International Code of Ethics for Professional Accountants and important code that lays out the principles and requirements for professional accountants. These include the five fundamental principles. Professional accountancy bodies adopt the IESBA code, sometimes adding additional explanations and guidance, and release their ethics codes for members.

Question 2.1

Which of the following are fundamental ethical principles according to the IESBA Code of Ethics?

  • Professional behaviour, legality, confidentiality
  • Objectivity, professional competence and due care, personal behaviour
  • Integrity, legality, objectivity
  • Objectivity, integrity, professional behaviour
  • Professional behaviour and confidentiality are correct. Legality is not one of the five fundamental principles, although a breach may fall under the principle of integrity.
  • Objectivity, professional competence and due care are correct. Personal behaviour is not normally considered as part of the fundamental principles although it could impact upon professional behaviour if it impinges on the work of accountants.
  • Integrity and objectivity are fundamental principles. Legality is not one of the five fundamental principles although a breach may fall under the principle of integrity.
  • The five principles are integrity, objectivity, personal competence and due care, confidentiality, and professional behaviour.

Ethical behaviour

Qualifying as a member of a professional accountancy body carries responsibility for ethical behaviour and ethical decision-making. Individuals might view ethical decisions from different perspectives, including cultural and country differences. Accountants must not only comply with their country’s laws, rules and standards, but they must also adhere to ethical principles of their professional body. This applies to all accountants working in industry and in practice. However, complying with ethical requirements is not always straightforward in real-life situations. In whatever role accountants take in organisations, they are likely to face challenging and confusing situations where the course of action is not always clear. Organisations might also have their own set of ethical principles or policies, for example, how to deal with social media, communication with customers and suppliers, ethical breaches, corporate failures, and conflict of interest.

The ethics of the accountancy profession have been challenged in recent times through some high-profile cases:

Pause to reflect

  • Do you feel that such cases are anomalies or are they representative of how the profession operates?
  • What do you think the impact of such cases is on other accountants and their work (either in practice or business)?
  • How might the profession address such concerns?

Case study 2.2 An ethical dilemma in the construction industry

You have been the head of finance for a local construction company for a number of years. The company is considering three locations for its next building project: Shanghai, Gaborone or Brussels. You are involved in creating a business plan.

The directors’ preferences are clear about an option of building a new housing development of 80 houses in the outskirts of Gaborone. This project would involve purchasing a plot of land which happens to be located directly behind your parents’ house.

If the development goes ahead, your parents will no longer have beautiful views from their house, which was one of the main reasons why they bought it ten years ago. In addition, it might compromise the biodiversity of the area as it is believed a rare species of beetle can be found on the land.

Pause to reflect

  • Is there an ethical issue in this scenario?
  • What action should you take in this situation?
  • Which of the five ethical principles is impacted in this scenario?

2.6 Summary

Decorative image.
  • Professionalisation relies on formal qualifications and regulatory powers; it is seen as essential for social order but is often critiqued as a method of self-serving social closure.
  • Social closure and credentialism limits access to professions, enhancing exclusivity and benefits, as seen in the historical development of the accountancy profession through exam-based recruitment.
  • The accountancy profession is working to open up to a more diverse membership, despite its foundations in exclusivity and privilege.
  • Almost every country has at least one or two professional accountancy bodies; some are known globally, with widespread geographical membership, while others focus primarily on domestic markets.
  • Each professional accountancy body has a distinct focus and different qualification framework.
  • Professional accountancy qualifications build a range of technical, professional and transdisciplinary competences needed to engage in the profession.
  • Professional accountants are required to follow a code of ethics that outlines important values, beliefs and behaviours to ensure integrity and accountability.

Further reading

Ethical business is all about people.

Four ways that chartered accountants can stop criminal activity in their organisation.

ACCA report: What is ethics?

ICAEW free ethical training.

References

The images in this unit were designed by Christopher Wardle-Cousins, Senior Digital Marketing Officer at the University of Lincoln.

  • Anderson, M., Edwards, J. R., & Chandler, R. A. (2005). Constructing the ‘well qualified’ chartered accountant in England and Wales. Accounting Historians Journal, 32(2), 5–54.
  • Anderson, M., & Walker, S. P. (2009). ‘All sorts and conditions of men’: The social origins of the founders of the ICAEW. The British Accounting Review, 41(1), 31–45.
  • Annisette, M. (1999). Importing accounting: The case of Trinidad and Tobago. Accounting, Business & Financial History, 9(1), 103–133.
  • Atkins, J., Doni, F., McBride, K., & Napier, C. (2023). Exploring the historical roots of environmental and ecological accounting from the dawn of human consciousness. Accounting, Auditing & Accountability Journal.
  • Atkins, J., & McBride, K. (2023). Paradigm shift or shifting mirage? The rise of social and environmental accountability. In Handbook of Accounting, Accountability and Governance (pp. 168–194). Edward Elgar Publishing.
  • Bakre, O. M. (2005). First attempt at localising imperial accountancy: The case of the Institute of Chartered Accountants of Jamaica (ICAJ)(1950s–1970s). Critical Perspectives on Accounting, 16(8), 995–1018.
  • Baskerville, R. F. (2006). Professional closure by proxy: The impact of changing educational requirements on class mobility for a cohort of Big 8 partners. Accounting History, 11(3), 289–317.
  • Carnegie, G. D., & Edwards, J. R. (2001). The construction of the professional accountant: The case of the Incorporated Institute of Accountants, Victoria (1886). Accounting, Organizations and Society, 26(4–5), 301–325.
  • Carnegie, G., Gomes, D., McBride, K., Parker, L., & Tsahuridu, E. (2024). How accounting can shape a better world: Framework, analysis, and research agenda. Meditari Accountancy Research, 32(5), 1529–1555.
  • Durkheim, E. (1933). The division of labour in society. Macmillan.
  • Durkheim, E. (1957). Professional ethics and civil morals. Routledge.
  • Edwards, J. R., & Walker, S. P. (2007). Accountants in late 19th century Britain: A spatial, demographic and occupational profile. Accounting and Business Research, 37(1), 63–89.
  • Edwards, J. R., & Walker, S. P. (2010). Lifestyle, status and occupational differentiation in Victorian accountancy. Accounting, Organizations and Society, 35(1), 2–22.
  • Egan, M., Voss, B. D. L., Mcguigan, N., & Powell, L. (Accepted/In press). Finding our voices: Exploring diversity, inclusion and accounting by the marginalised and managed diverse. Social and Environmental Accountability Journal.
  • Gammie, E., Allison, M., & Matson, M. (2018). Entry routes into the Institute of Chartered Accountants of Scotland training: Status versus sustainability. Accounting History, 23(1–2), 14–43.
  • Hayes, C., & Jacobs, K. (2017). The processes of inclusion and exclusion: The role of ethnicity and class in women’s relation with the accounting profession. Accounting, Auditing & Accountability Journal, 30(3), 565–592.
  • Haynes, K. (2017). Accounting as gendering and gendered: A review of 25 years of critical accounting research on gender. Critical Perspectives on Accounting, 43, 110–124.
  • Kedslie, M. J. (1990). Mutual self interest – a unifying force: The dominance of societal closure over social background in the early professional accounting bodies. Accounting Historians Journal, 17(2), 1–19.
  • Kirkham, L. M., & Loft, A. (1993). Gender and the construction of the professional accountant. Accounting, Organizations and Society, 18(6), 507–558.
  • Larson, M. (1977). The rise of professionalism: A sociological analysis. University of California.
  • Lee, T. A. (1995). The professionalization of accountancy: A history of protecting the public interest in a self‐interested way. Accounting, Auditing & Accountability Journal.
  • Lee, T. A. (2004). Economic class, social status, and early Scottish chartered accountants. Accounting Historians Journal, 31(2), 27–51.
  • Lee, T. A. (2021). Edinburgh accountants in public practice pre-collective organisation: 1757–1834. Accounting History Review, 31(2), 165–191.
  • Matthews, D., Anderson, M., & Edwards, J. R. (1998). The priesthood of industry: The rise of the professional accountant in British management. Oxford University Press on Demand.
  • Matthews, D. R. (2017). Accountants and the professional project. Accounting, Auditing & Accountability Journal.
  • McBride, K., & Verma, S. (2024). Accounting in society: A historical perspective Ch 3 p. 29.
  • Shackleton, K. (1999). Gender segregation in Scottish chartered accountancy: The deployment of male concerns about the admission of women, 1900–25. Accounting, Business & Financial History, 9(1), 135–156.
  • Sian, S. (2007). Reversing exclusion: The Africanisation of accountancy in Kenya, 1963–1970. Critical Perspectives on Accounting, 18(7), 831–872.
  • Sian, S., & Verma, S. (2021). Bridging the divide: The rise of the Indian Accountant from 1900 to 1932. The British Accounting Review, 53(2).
  • Uche, C. U. (2002). Professional accounting development in Nigeria: Threats from the inside and outside. Accounting, Organizations and Society, 27(4–5), 471–496.
  • Verhoef, G. (2014). Globalisation of knowledge but not opportunity: Closure strategies in the making of the South African accounting market, 1890s to 1958. Accounting History, 19(1–2), 193–226.
  • Virtanen, A. (2009). Accounting, gender and history: The life of Minna Canth. Accounting History, 14(1–2), 79–100.
  • Volmer, H. et al. (2024). Encountering accounting in society Ch 31 p.445. Handbook of Accounting in Society.
  • Walker, S. P. (2006). Philanthropic women and accounting. Octavia Hill and the exercise of ‘quiet power and sympathy’. Accounting, Business & Financial History, 16(2), 163–194.
  • Walker, S. P. (2008). Accounting histories of women: beyond recovery?. Accounting, Auditing & Accountability Journal.
  • Walker, S. P. (2020). The Society of Accountants in Edinburgh, 1854–1914: A study of recruitment to a new profession. Routledge.
  • Weber, M. (1949). ‘Objectivity’ in social science and social policy. The Methodology of the Social Sciences, 49–112.
  • Yapa, P. S. (2006). Cross-border competition and the professionalization of accounting: The case of Sri Lanka. Accounting History, 11(4), 447–473.
  • Zelinschi, D. (2009). Legitimacy, expertise and closure in the Romanian accountant’s professional project, 1900—16. Accounting History, 14(4), 381–403.

  1. Durkheim, 1933, 1957 ↩

  2. Lee, 2021 ↩

  3. Lee 1995, 2004, 2021; Matthews, Anderson, & Edwards, 1998; Walker, 2020; Kedslie, 1990; Anderson & Walker, 2009; Edwards & Walker, 2010 ↩

  4. Anderson, Edwards, & Chandler, 2005, p. 5 ↩

  5. Larson, 1977; Matthews, 2017 ↩

  6. Shackleton, 1999 ↩

  7. Carnegie et al., 2024 ↩

  8. Egan et al., 2024 ↩

  9. Atkins & McBride, 2023 ↩

  10. See, for example, studies focusing on Kenya (Sian, 2006), Trinidad and Tobago (Annisette, 1999), Jamaica (Bakre, 2005), and Nigeria (Uche, 2002). ↩