Accountants and the creation of Chartered Accountancy

‘There were moneyers, men of metal – counters and discounters – sharp, grim, prudential faces – eyes weak with ciphering by map-light – men who say to gold, Be thou paper; and to paper, Be thou turned into fine gold.’ Thus did Walter Scott describe those gathered for the annual meeting of the Edinburgh Life Assurance Company of which he was ‘a graceful and useless appendage called a Director Extraordinary.’ At this time the financial affairs of such companies were appraised by solicitors, many of whom acted as auditors alongside their other work. Two solicitors, Daniel Fisher (Number 48) and Walter Jollie (Number 8) acted as auditors of the Edinburgh Life Assurance Company at different times. As the 19th century developed some solicitors began to concentrate on financial work of this kind and many began to describe themselves as accountants. One such was Patrick Borthwick (Number 27). Patrick trained his son, Archibald, who then set up his own accountancy practice in York Place. Although Archibald described himself as an accountant, as can be seen from this advert, in the 1840s he was still engaged in law work as well. In 1854 Archibald chaired a small group of fifteen men, all of whom were working as accountants, and shared a concern that some of those offering their services as accountants were not of an appropriate quality. The group decided to form The Society of Accountants, with members being expected to meet an approved standard. At that first meeting were four other previous Albany Street residents, Andrew Paterson (Number 47), James Dickson (Number 52), Thomas Scott (Number 41), and James Ogilvy (Number 42). This was the first ever professional grouping of accountants, later termed Chartered Accountants, and the model for the other chartered professional groupings throughout the world. Fifty years later there was an event to mark the Society’s creation at which the then Lord Advocate described the significant change: ‘There are probably few professions which can show a greater contrast between the present and the past….in the beginning of the 18th century accounting was practised by solicitors and other persons of integrity and position. In the last century as the complexity of business and trade increased, as the intricacy of modern finance grew, and especially owing to the great development of joint-stock companies, the demands made upon the skills of the professional accountants increased so their position was much advanced. Before the middle of the 19th century no standard of proficiency was required for an accountant. There was no settled form of training and anyone who pleased to call themselves an accountant could set up in business. It was in these circumstances, in this city of Edinburgh, that the accountants resolved to apply for a Charter in 1854. Since then the designation of Chartered Accountant has become well recognised and honoured all over the country, and in the colonies and wherever civilisation is known. The result is that all of us who are favoured to meet accountants – and happily or unhappily we lawyers have that fortune often – recognise them always to be men of capacity and skill, men of sterling integrity, men fitted to be what they are – honoured members of a learned profession.’

John Macdonald (Number 7) was retired as an accountant when he lived at Number 7. For most of his career he had acted as General Treasurer of the Free Church of Scotland. In the 1840s, when Dr Thomas Chalmers had the idea for the first Sustentation Fund for the Free Church, Macdonald had helped Chalmers work out the details. The Fund invented an approach whereby all congregations contributed according to their means, and the money donated paid all ministers an 'equal dividend'. This fund provided a modest income for 583 ministers in 1843/4, and by 1900 was able to provide an income for nearly 1200. This centralising and sharing of resources was previously unknown within the Protestant churches in Scotland, but later became the norm.

From around the 1870s, a number of Chartered Accountants became involved with managing and investing other people's money. In 1873, the first investment trust was launched as the Scottish American Investment Company Limited, and in 1895, James Ivory, the son of William and Jane Ivory (Number 12), went into partnership with Thomas Sime, as Ivory & Sime. Although Sime emigrated to Canada in 1907, Ivory & Sime continued and from an original capital of £15,000, by 1939 the company was managing funds totalling £7 million.