Reviewed by Stephen A. Zeff Rice University

Leonard Spacek was the managing partner of Arthur Andersen & Co. from 1947 to 1963 and was the person most responsible for its ascendancy as one of the Big Eight public accounting firms. He served as chairman of the partnership from 1963 to 1970, and retired from the firm in 1973. He was the firm’s innovative leader who challenged conventional wisdom in a conservative profession.

Spacek was unquestionably one of the most colorful and important figures on the U. S. public accounting scene during the 1950s and 1960s, and the publication of this oral history is a welcome event. This volume contains a verbatim transcript from four days of videotaping during October 1983 and May 1984 (Spacek’s 77th year) at the firm’s Center for Professional Education in St. Charles, Illinois. Ten of Spacek’s long-time friends and colleagues took turns at the questioning. They drew on their diverse associations with Spacek to elicit his recollections about a wide array of subjects: the personality and management style of the firm’s founder and namesake, the contributions of the firm’s early partners, Spacek’s philosophy and strategy as architect of the firm’s growth, the reasons behind Spacek’s frequent disputes with professional leaders over accounting principles, and some of the firm’s memorable engagements. What emerges from Spacek’s rendering of innumerable anecdotes, some told several times, is the portrait of a decisive, indefatigable, incorruptible, straight-talking Midwesterner who is several steps ahead of everyone around him. And, as is evident throughout this oral history, he has a remarkable memory.

One of the anecdotes helps explain the motivation behind the phenomenal growth during Spacek’s tenure at the helm of the Chicago-based firm. Following Arthur Andersen’s death in 1974, Spacek gave several speeches expounding his views on professional issues. The accounting establishment in New York was not amused. John L. Carey, the influential secretary of the American Institute of Accountants, invited Spacek to New York to meet with the heads of the large firms in the august setting of the Union League Club. At the meeting, which was chaired by George O. May, the retired senior partner of Price, Waterhouse & Co. and the doyen of the profession, Spacek was informed that “the leadership of the accounting profession must rest in the hands of the larger, successful firms and that the smaller firms [such as Arthur Andersen & Co., which was 20th in size] can enjoy the success but must acknowledge that the leadership of the profession is in the hands of the larger firms” [p. 55]. This incident became indelibly etched in Spacek’s mind (he refers to it again on pp. 113, 173 and 179). On hearing May’s words, Spacek immediately resolved that “if it is bigness that it takes to have any say in the accounting profession, why then we will concentrate on first things first. We’ll get big. That’s when I really went out for promotion” [p. 55].

Spacek also explains the complications he had to face at the time of the founder’s death, since Arthur Andersen had never actually signed the partnership contract, and an initial vote was taken to liquidate the firm. He also discusses the launching of the firm’s training school in 1940 (the first centralized training program by an accounting firm), the development of the “one Firm concept”, and the opening of overseas offices in the 1950s, as well as his 1957 Milwaukee speech (a vintage example of Spacek’s outspokenness) which precipitated a Congressional hearing into railroad accounting and almost led to his expulsion from the American Institute of CPAs.

That Arthur Andersen & Co. would publish the unadorned thoughts of its maximal leader is further evidence of the open-ness for which the firm is well known. But unless the reader already knows a good deal about the historical development of the firm, some of the discussion may be confusing. Spacek’s recollections dart back and forth across the years, and the tim-ing of a number of the incidents that he discusses, and their relation to one another, is not always clear.
The oral history should be read in conjunction with the firm’s 75-year history, A Vision of Grandeur, which was published by the firm in late 1988. The 204-page history is well-researched, well-written, and handsomely illustrated, but, as far as I know, it has not yet been reviewed in any of the journals. The author drew on Spacek’s oral history, and conducted a further interview with Spacek.

There is a nice use of footnotes to supply some of the par-ticulars that round out Spacek’s responses. I could find only one error. On page 226, the reference should be to the Committee on Accounting Procedure, not the Accounting Principles Board.

Northwestern University’s Accounting Research Center and Arthur Andersen & Co. are to be commended for undertaking this venture. Other firms should be encouraged to do the same.