The Sphere of the Accountant and the Economist: in the Administration of Public Utility Service
| Published date | 01 October 1926 |
| Author | F. J. Alban |
| Date | 01 October 1926 |
| DOI | http://doi.org/10.1111/j.1467-9299.1926.tb02273.x |
The Sphere
of
the
Accountant
and
the Economist
in
the Administration
of
Public Utility Service
By
F.
J.
ALBAN, F.S.A.A.
HE many phases of the administration of public utility services
T
which are being dealt with in other papers at this Conference,
make it obvious that the scope
of
this one ought to be construed somewhat
strictly
;
even
so,
I am afraid that in this attempt which mainly deals
with the
“
Sphere of the Accountant
”
I
may considerably trespass upon
the paper of my former Chief in the National Insurance Service, Sir
Henry
N.
Bunbury, K.C.B.
(I)
The Scope
oj
the Accountant.
The
accountant’s position in relation to
a
public utility service is
difficult to delimit.
Some distinction may be drawn between undertakings carried on by
local authorities and those under the control of statutory companies.
Generally speaking, the duties
of
an accountant to a public utility service
undertaken by
a
local authority
will
embrace all those devolving upon
an accountant in a privately owned undertaking.
Primarily the duties of the accountant are
in
regard to the systematic
ascertainment and recording of financial facts, the tabulation
of
these
facts, and their periodical presentment in summarized
form.
This may be
regarded as representative of the scope or sphere
of
an accountant
a
generation ago. Since then the extent of his activities has considerably
widened.
(2)
The Accountant
as
a
Contributor
to
Economic Science.
I
recall that at a conference of Incorporated Accountants held in
November,
1921,
at Liverpool, Sir Josiah Stamp laid down the gage of
battle in
his
statement
:-
“
I
make this serious indictment
of
Accountants.
“
Scientific Accountancy has now been developed for some
50
years, but
I
cannot trace
that it
has yet made
a
single substantial contribution to economic
science over its
own
field
of
the analysis
of
the results of industry, although it
has
practically a monopoly grip of the required data.
I
am
not referring
so
much
to
costing details, which are hardly
uniform
yet,
as
to the ordinary trading
results, balance sheets and their details.”
While the conference did
not
accept Sir Josiah’s “capital charge
against accountancy
”
his emphasis
of
the need of stronger relationship
398
Accountants and Economists
between the workers in the field
of
economics and the members of the
accountancy profession was most timely.
(3)
The
Abstvacts
of
Accounts
of
Local
‘4
uthoritics.
At
that conference it was pointed out that valuable data had for the
past decade been compiled and made easily available in the abstracts
of
accounts published by the larger local authorities.
Hereon it may perhaps be added that these abstracts have become
volumes
of
such magnitude as almost
to
defeat the very object of their
compilation. To the earnest student
of
the work
of
a
local authority,
and the services and public utility services which it controls, these
abstracts are
a
perfect treasure of information. Income and expenditure
are set out in surprisingdetail, andstatistical matter and unit costs abound.
But to the ordinary ratepayer, the abstracts are apt to be confusing
because
of
their very size and scope.
During the last few years, however, the admirable practice has evolved
of issuing epitomes which, within the confines
of
say
a
dozen tables-
each limited to a page
of
simply expressed figure-facts-“ Bovrilise,”
as
it
were, the essential elements in the accounts of the local authority.
Notable examples
of
these are the Birmingham
and
Cardiff epitomes.
(4)
The De9cndence
of
Econoinics
,upon
Statistics.
Extraordinarily dependent is the science
of
economics-if it
is
to be
of greater practical utility in the solution
of
our present-day problexns-
upon statistical investigation. To obtain
a
knowledge
of
the theory
of
economic science is a comparatively simple matter, but to test this theory,
and apply
it
to every-day affairs, much greater use must be made
of
statistical verification of the economic theory.
Statistics may
in
this sense be regarded as the gap between the
accountant and the economist. The difficulty lies in deciding who should
bridge the gap. The accountant in his daily work is constantly handling
the material which the economist requires. The accountant, however,
without
a
good grasp
of
the science
of
economics, may be incapable
of
dealing with the data
at
his
disposal. This stresses the need for widening
the training and outlook
of
accountants, and it is gratifying to find that
the recognized bodks
of
Accountants now give definite place to the
“
economic
”
side in their examinations.
For
instance, in
the
Chartered Accountants’ Final Examination
“
Costing
”
is
a
compulsory subject, and
“
Economics
”
is one
of
the
optional subjects.
In the Incorporated Accountants’ examinations there are three
separate compulsory papers dealing with-
“
Statistical Methods.”
“
Cost Accounts.”
“
Elementary Economics.”
399
To continue reading
Request your trial