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The Origins of Accountancy Training in the UK

Origins of accountancy

In the 19th century, the Industrial Revolution caused a surge in trade and an increasing demand for better and more accurate financial information. Keeping track of what one had sold, and at what price became essential. The accountancy profession was born out of this world. In this context of profound change, the first accounting body (The Institute of Chartered Accountants in Scotland) was founded on 11th December 1854.

From the late 19th century onwards, a series of other professional bodies followed suit. 1880 saw the Institute of Chartered Accountants in England and Wales (ICAEW) being given royal charter, in addition to The Chartered Association of Certified Accountants (ACCA) - which can trace its origins back to 1903. Finally, The Institute of Cost and Works Accountants, that later became the Chartered Institute of Management Accountants (CIMA), was founded in 1919. Over the subsequent years many other professional bodies were founded, giving an indication of the plethora of activity and appetite for training that was taking place around the late 19th century.

Parallel to these developments (1884 onwards), H Foulks Lynch & Co were publishing materials to help accountancy students, and occasionally provided face to face training. Mr Foulks Lynch built up his business at a time when the ICAEW had begun to insist on the passing of examinations as a condition for membership. The British government also passed acts that created a more complex regulatory framework in which accountants were increasingly required to operate.

During this early period, training to be an accountant was not a glamorous affair. Between 1928-1933, Charles Kohler chronicled his time as a London chartered accountant’s articled clerk. Typical of this era, he received no pay for his five years’ of hard work, and studied mostly using a correspondence programme with Foulks Lynch. He stated that it was “Thorough but narrow, practical rather than theoretical”. The absence of a salary required one to study in one’s own time and gave limited support when attempting to pass a set of demanding examinations. There were no exemptions and failing a paper resulted in having to retake them all (a practice that continued well into the 1980s). Pass rates were therefore relatively low compared with modern expectations, and were a drain on students’ and their parents' personal finances.

Accountancy training was in need of change. So in 1953, V.R. Anderson (known by many as ‘Ronnie’) begun a process that would offer students an alternative route to qualification.

Ronnie Anderson was perhaps the first person to realise that a course of intensive study was the way forward. Having distinguished himself in his final ACA exams, he had started to tutor trainee chartered accountants prior to the Second World War. In post war Britain, there was a steady flow of ex-servicemen seeking new careers in accountancy and Ronnie made his name in helping them become qualified accountants.

Ronnie became very well known, so much so that he quickly needed extra space to run his ever expanding courses. In 1953, he purchased Caer Rhun Hall, allowing him to expand, this time into residential training. The hall was a late Victorian pile of some 20 bedrooms in the Conwy Valley in North Wales, built in the 1890s on the site of an earlier 17th century house, near to the remains of a Roman fort.

Within this tranquil, grand setting, Ronnie Anderson’s courses went from strength to strength, and word spread of his successful learning approach - compared to the worthy, but arduous, correspondence course method. A typical working day was 9am till 10pm, with regular breaks. Friday was exam practice day and Saturday was a much needed rest day. Sunday, however, was “back-to-work” starting with a detailed commentary on the practice exams, followed by self–appraisal sessions and one-to-one tuition.

The Caer Rhun model involved long periods of study, punctuated with tests marked by the tutors who, in turn, gave personalised feedback to the students. This method allowed tutors to really understand how the students learned and what they needed to do to improve. In many ways, these are the same principles Kaplan use to this very day.The approach was so successful that Anderson was employed by the ICAEW to run teacher training courses at Caer Rhun and in London.

It was inevitable that these modern teaching practices would extend their reach. In 1957, two bright Caer Rhun students, Mervyn Frankel and Gerry Thomas, were recruited onto the teaching staff, and went on to set up a practice in Park Place, London, under the name Anderson, Thomas and Frankel (ATF). ATF soon developed into a major force in the tuition business, mainly in London, whilst Caer Rhun Hall continued to flourish, and by the early 1970s they acquired an additional centre nearby, called Hafodonus Hall.

A change in company legislation in the late 1960s was to have a profound effect on the accountancy profession and its training providers. On 27th July 1967, HM Queen Elizabeth formally approved the Companies Act 1967. This law repealed the Companies Act 1948 which stated “No…..partnership consisting of more than 20 persons shall be formed……”. Before 1967, no firm could have more than 20 partners and this limit to their size kept them from becoming national. The new Act resulted in a merger spree, allowing the growth of the national and global accountancy firms we have today.

Additionally, around this time, the ICAEW made firms responsible for their trainees’ contracts and also made a university degree an entry requirement. For many students, this also had the effect of shortening articles from five to three years and contributed towards intense growth.

Due to the major legislative and commercial changes affecting the accountancy profession in the UK, national financial training providers, such as Kaplan, rapidly developed and flourished. They became a crucial element of the modern accountancy landscape.

Read our next blog in this ‘Kaplan Heritage Series’, where we continue the chronology from the 1970s to 2003.

Thanks for their valuable contributions to: Peter Houillon, Julie Hughes, Peter Anderson and Tony Unett.

And thanks to John Bennett who collated stories from John Gibbs, Jeremy Hanley, Bob Phelps, Mike Plant and Phil Todd.