The ‘public auditor’: an experiment in effective accountability

Abstract

Mutual associations were created to provide, through a system of self-help, for the welfare of members of the British working class increasingly separated from the family unit characteristic of an agricultural-based economy. The appropriate method for protecting the resources required at some future date by the poorly off in conditions of need produced a challenge for Parliament. This paper examines the development of the concept of the ‘public auditor’ to describe the individuals considered suitable to undertake the audit of mutual associations, and the increasing statutory emphasis on the desirability of appointing a person ‘carrying on publicly the business of an accountant’ to certify the annual returns made to the Registrar of Friendly Societies. This paper argues that statutory recognition of the accountant as a member of a skilled occupational group represents an important stage in the professionalisation process. This paper shows that the concept of the public auditor was rejected by most mutual associations, while the larger organisations made the voluntary decision to appoint professional accountants to undertake the audit function.