Failure to unify the Australian accounting profession: the case of four unsuccessful merger attempts, late 1960s to late 1990s
Creators: name: Sidhu, Jasvinder
Publisher: name: RMIT University
Year: 2024
Subjects: classificationCode: 350101
subject: Accounting theory and standards
classificationCode: 441005
subject: Social theory

description: This study examines the four unsuccessful attempts from the late 1960s to the late 1990s to merge the two main professional accounting associations in Australia: the Australian Society of Accountants (the Society) and the Institute of Chartered Accountants in Australia (the Institute). Primary data from public archives and oral history interviews, supplemented by relevant secondary sources, are drawn upon to explain the failures of each of the proposed mergers and consider their implications. Two complementary theoretical perspectives inform the study: the concept of “boundary-work” and the dilemma professional associations confront in prioritising exclusivity or market control as their organisational strategy. The approach used in this study is critical and interpretative, being part of the “new accounting history” paradigm. This study finds that in the period before the first merger vote in late 1969, the Institute had relaxed its traditional emphasis on pairing exclusivity and public practice, while the Society was seeking to elevate its status in response to a legitimacy crisis. These circumstances raised the prospect of there being sufficient commonality of purpose to enable the proposed merger to succeed. However, while Society members overwhelmingly supported it, Institute members defeated the first proposal. Despite this failure, discussions on matters of mutual interest continued and eventually led to the mounting of second merger attempt in 1981. The outcome was similar to that of the first merger attempt. Two more merger attempts were mounted in 1991 and 1998, which also failed owing to insufficient support from Institute members. Each of the four merger attempts was initiated by the leaders of the Institute. Despite many similarities, each merger attempt had its own unique features and conditions. Some common reasons for mounting a merger were to tackle a legitimacy crisis; to gain the ability to speak with one voice and increased lobbying powers; to improve the quality of accounting standards, service quality, and international representation; and to eliminate duplication of efforts and thus reduce costs. The findings were analysed using two theoretical frameworks. The first theoretical framework was the boundary work of Gieryn (1983) and its extended application by Annisette (2017). This study applies and extends the framework of Annisette (2017) and offers the boundary-work framework as a path to examining discursive practice within the context of mergers of accounting associations. This approach represents an alternative to more traditional frameworks, such as closure theories. The four merger attempts that are the focus of this study were supported by the leaders of both professional bodies amidst discursive claims of the benefits of “oneness”. However, a second and distinctive discourse was also mobilised at the membership level since some CAs asserted their superiority over Society members. Annisette’s (2017) framework is applied to understand and analyse these two competing linguistic claims that ultimately led to three further failed merger attempts. Of particular importance are the discursive tactics employed by some members of the Institute, in defiance of their leadership, in seeking to continue to remain separate from non-chartered accountants. In this way, the boundary-work is depicted as a “useful ideological style” (Gieryn 1983, p. 787) and when viewed from this perspective can augment understanding of the failure of the four merger attempts between the Institute and the Society. In the case of this thesis, the boundary-work framework is extended to a new context involving mergers of professional accounting associations. This dispute of demarcation in science was not resolved by a formal process, such as a vote. The accounting profession in Australia is not fully regulated, which exposed the profession to a complex merger process with different levels of hurdles that needed to be cleared. At the first level, the leadership of both bodies needed to agree. At the second, and a more critical level, the ultimate success of any merger proposal depended on the members of both bodies, which is where it failed in each case. The removal of a boundary between two organisations requires a formal process, which put the framework to a new test. Traditionally, the Society had favoured a market control strategy (Carnegie, 2016), while the Institute emphasised an exclusiveness strategy (Carnegie &amp; Edwards 2001; Carnegie, et al. 2003), but during the four merger attempts both bodies were moving away from these two extremes of organisational strategies. This shows that the framework also applies to situations in which original strategies are modified over time and are not very rigid. This implies that a binary selection of either exclusiveness or market control is not the only choice that professional organisations may have. The organisational strategies can be modified from being two extremes, namely, either exclusivity or market control, enabling adoption of a more blended approach. On 31 December 2014, the Institute and the New Zealand Institute of Chartered Accountants merged to form the Chartered Accountants Australia and New Zealand (CAANZ) with more than 100,000 members. However, in 2018, CPA Australia remains the dominant body, with more than 150,000 members. Unification of the Australian accounting profession has remained elusive and is not a current priority for either professional body.