Reviewed by S. J. Lambert University of Nebraska

The First Sixty Years is a history of Arthur Andersen & Co. (AA) from 1913 to 1973. It represents a thorough revision and reorganization of an earlier history of the firm, The First Fifty Years, as well as an updating of the firm’s history for the period 1964 through 1973. The First Fifty Years comprised nine chapters in 201 pages.The First Sixty Years comprises thirteen chapters in 189 pages. The revision was shortened by eliminating about sixty pages which had listed various personnel in the AA organization. In its place are detailed biographical sketches of the four chief executives of AA from 1913 to 1973: Arthur Andersen, Leonard Spacek, Walter Oliphant, and the current chief executive, Harvey Kapnick. A brief biographical sketch of some of AA’s other key personnel is also included.

The foreword states that material for the period prior to World War II is included almost verbatim from the earlier publication. Material subsequent to World War ll has been integrated with the new material from the 1964-1973 period.

The firm’s history begins with the birth of the firm in 1913 when Arthur Andersen and Clarence M. Delany acquired the net assets of The Audit Company of Illinois. The first six chapters trace the growth of AA from its birth through 1973. Critical events which helped the firm grow include, for instance, the work during the twenties in financial investigations and the firm’s efforts in successfully rehabilitating the companies in the Insult public utility empire.

Chapter seven briefly traces the development of AA as a worldwide organization through three separate phases. AA began operating worldwide through representation arrangements, followed by joint undertakings, and finally established their own offices throughout the world.

Chapter eight analyzes the development of the three divisions of AA’s practice: auditing, taxes, and administrative services. Auditing is treated here only briefly since the development of the firm as discussed in other chapters is related primarily to auditing. It is interesting to note from the discussion of administrative services the impact that World War II had upon systems work. From their wartime experiences businessmen brought back an increased appreciation of accounting data for decision making as well as a favorable attitude toward mechanizing accounting and clerical routines. Thus a new area of development for accounting was opened into which AA successfully expanded.

Chapter nine discusses the evolution of the firm’s administrative structure, significant aspects of which occurred after 1963 and hence were not included in the earlier history.
Chapter ten, “Foundations of Professional Competence,” draws heavily from material in the earlier publication. AA’s emphasis on a “one-firm” concept is discussed along with the firm’s policy of speaking with one voice on professional matters. The history of the firm’s committee on accounting principles and auditing procedures is also mentioned. AA’s approach to maintaining effective communication within the firm through their “subject file,” The Chronicle, and periodic meetings, plus the firm’s position toward “new patterns of litigation,” is also covered in chapter ten.

Chapter eleven entitled, “The Development of People” discusses the transition from the use of temporary staff during the busy season to permanent career-oriented professionals. With career-oriented professionals came a new emphasis on recruiting and professional training and development.

Chapter twelve on “Leadership in the Profession” discusses speeches and articles by the firm’s chief executives and partners. Many of these have been published by the firm and are available to accounting educators. Particular attention is paid to the contributions of Leonard Spacek. A final concluding chapter on “The Challenge of the Future” rounds out the sixty year history.

The First Sixty Years is well written and very interesting, especially to the accounting historian. Through reading the history of how one accounting firm has grown, one gets another glimpse of how professional accounting has developed in the United States.

(Vol. 3, No. 3, p. 4, 1976)