Few institutions wield as much influence and prestige in the history of accountancy as the Institute for Chartered Accountants in England and Wales (ICAEW). Established as a pioneering force in the realm of accountancy, the ICAEW has played an instrumental role in shaping global standards, professional ethics, and educational pathways in the field.
Accountancy Today delves into the vast history of the Institute for Chartered Accountants in England and Wales from its 1880 beginning to the present day
Here we revisit the history of the storied body, the humble beginning of the institution and the important role it played in codifying the profession as well as the important regulatory role it now plays today.
Birth and early growth
The roots of the ICAEW trace back to the dawn of the 19th Century, a period marked by the burgeoning industrial revolution and the consequent need for robust financial stewardship. In 1880, a group of visionary accountants convened at the Gray’s Inn Coffee House in London to formalise their commitment to uphold integrity and expertise in the burgeoning field of accountancy.
Until the mid-19th Century, the role of accountants in England and Wales was restricted to that of bookkeepers, in that accountants merely maintained records of what other business people had purchased and sold.
However, with the growth of the limited liability company and large scale manufacturing and logistics in Victorian Britain, a demand was created for more technically proficient accountants to deal with the increasing complexity of accounting transactions dealing with depreciation of assets, inventory valuation and the Companies legislation being introduced.
It was formed of five associations that existed before its royal charter. These were the Incorporated Society of Liverpool Accountants, Institute of Accountants in London, Manchester Institute of Accountants, the Society of Accountants in England and the Sheffield Institute of Accountants.
The institute received its royal charter in 1880 from Queen Victoria, thus solidifying its status as a main authority in the realm of accountancy. From its inception, the ICAEW set out to establish rigorous standards of professional competence and ethical conduct, serving as a beacon of trust and reliability in an increasingly complex financial landscape.
Pioneering leadership and advocacy
Throughout its formative years, the ICAEW distinguished itself through visionary leadership and unwavering advocacy for the advancement of the accounting profession. Under the guidance of pioneering figures such as Charles Fitch Kemp, the institute spearheaded initiatives to enhance professional education, promote best practices, and safeguard the public interest.
In 1920, following the Sex Disqualification (Removal) Act 1919, the organisation admitted Mary Harris Smith, who became the first woman-chartered accountant in the world.
One of the ICAEW’s landmark achievements came in 1948 with the establishment of the Accountancy Foundation, a groundbreaking endeavour aimed at fostering collaboration between academia, industry, and the profession. This initiative underscored the institute’s commitment to innovation and continuous learning, laying the groundwork for future advancements in the field.
In 1957, ICAEW merged with the Society of Incorporated Accountants which was originally founded in 1885 as the Society of Incorporated Accountants and Auditors.
Upholding standards
As the 20th Century unfolded, the ICAEW’s influence transcended national boundaries, assuming a pivotal role in shaping global accounting standards and practices. Through strategic partnerships and collaborations with international bodies such as the International Federation of Accountants (IFAC) and the International Accounting Standards Board (IASB), the institute played a key role in harmonising financial reporting frameworks and promoting transparency in global markets.
The ICAEW’s commitment to excellence and professionalism also manifested in its rigorous certification process, which remains a gold standard for aspiring accountants worldwide. The prestigious ACA/FCA designation, bestowed upon qualified professionals who demonstrate proficiency, integrity, and ethical conduct, serves as a hallmark of distinction in the accounting profession.
As an improvement regulator, ICAEW works to protect the public by making sure ICAEW Chartered Accountants, firms that are regulated by ICAEW and students studying with ICAEW maintain the highest standards of professional competency and conduct.
An improvement regulator works to educate as well as monitor the quality of its firms and members’ work and enforce change (change can include restrictions, penalties, exclusion from membership or from working in a regulated area) when needed.
To ensure impartiality, the regulatory and disciplinary roles of ICAEW are carried out by a separate department, the Professional Standards Department. All of this work is overseen by several layers of independent governance; an independent board, the (IRB) and regulatory and disciplinary committees, where at least half of each board must be non-accountants, and oversight bodies including the Financial Reporting Council and the Insolvency Service.
In the face of rapid technological advancements and evolving regulatory landscapes, the ICAEW has remained steadfast in its commitment to adaptability and innovation. Recognising the transformative potential of emerging technologies such as artificial intelligence and blockchain, the institute has embraced digitalisation as a means to enhance efficiency, accuracy, and accessibility in financial reporting.
Moreover, the ICAEW has continued to advocate for regulatory reforms aimed at strengthening accountability and restoring public trust in the wake of financial scandals and corporate malfeasance. Through thought leadership initiatives, policy advocacy, and public outreach efforts, the institute remains at the forefront of efforts to promote ethical governance and responsible stewardship in the corporate world.
In the years to come, the ICAEW’s role as a standard-bearer of professionalism and ethical conduct will only grow in importance, as stakeholders increasingly demand accountability, transparency, and integrity in financial reporting and corporate governance. Through collaborative partnerships, cutting-edge research, and forward-thinking initiatives, the institute will continue to shape the future of the accounting profession, ensuring that it remains a force for good in the world of finance.
Liam writes in Accountancy Today