Reviewed by Hans V. Johnson University of Tulsa

The Profession of a Chartered Accountant is a collection of nine papers written by England’s Francis Pixley during the period of 1883 to 1897. The papers extensively cover what constituted due audit care in England in the late nineteenth century. The practice of law had a significant influence on auditing practice during this period and three papers cover bankruptcy, partnerships, and arbi tration.

The first paper, which is the title of the book, was read before the Chartered Accountants Students’ Society of London on Septem ber 29, 1885. The paper discussed the nature of work and responsi bilities of the Chartered Accountant, and the preliminary, inter mediate and final examinations of the Institute of Chartered Ac countants. Although, in Pixley’s words, many people considered an audit to be a “useless expense,” experience had proven that “no doubt many frauds are prevented through a knowledge that the books of an employer are subjected to a periodic scrutiny by ex perts, the probability of detection being considered too great to be risked.” (p. 7) (A similar conclusion was included in the Cohen Commission’s Report of the Commission on Auditors’ Responsi bilities published in 1978.)

Pixley believed that the work of a Chartered Accountant was “not suitable to all intellects.” Those who selected “mathematics for their principal study (at school or college) in preference to classics” were more most likely to “take an interest in the work of a pro fessional Accountant.” (p. 3) Pixley concluded his presentation before the students stating, “the initial work may be monotonous, but no duties fall to the lot of members of any profession which can be more varied or interesting than those of a Chartered Ac countant.” (p. 21)

Francis Pixley was a truly remarkable nineteenth century ac-countant and auditor. A careful reading of his book leaves one with the impression that were he alive today, he would understand and appreciate the problems faced by modern auditors. In writing their classic The Philosophy of Auditing, had Professors Mautz and Sharaf examined Pixley’s papers, they would have found each of the basic concepts of auditing. Internal control is not discussed, however there are comments to indicate that ideas such as segre gation of duties were recognized, (p. 76)

Writing in 1892 on financial statement audits of public companies registered under the Companies Act of 1862, he stated: “In the event of any inaccuracy being discovered later on, the directors and the officials of the company are first responsible to the share holders, the only responsibility attached to the Auditors being their omission to detect any inaccuracy.” And, the auditors “. . . are the agents of the shareholders and are accountable to them alone.” (p. 25) One has to look hard to find a better explanation of an auditor’s responsibilities for financial statements than that written on page 61. Pixley’s explanations of accrual based accounting sound strangely similar to those of Paton and Littleton.

The three classes of accounting errors (p. 71), the example of lapping (p. 75), the sales cut-off (p. 79), documentary evidence from “independent sources” (p. 53), the auditor’s certificate (p. 87), and explanations of various audit procedures all make for very interest ing reading. Had the accountants in the 1136 Tenant’s Corp. court case followed Pixley’s advice (p. 75), the fraud would have been uncovered early on.

I have cited just a few of the examples to which auditing in-structors and their students can relate Francis Pixley’s auditing papers to current practice.

Taken in the context of the time in which they were written, they are very insightful.