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Story: Accountancy

The accounting profession got off to a slow start in New Zealand. But in 2008 the New Zealand Institute of Chartered Accountants had around 30,000 members. Big international firms have a strong local presence. The global trend of recording social and environmental costs on the books has also taken root.

Story by Philip Colquhoun
Main image: Company accounts book, 19th century

Story Summary

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Accountants record, measure and report the money that businesses and people spend and receive. They check that accounts are accurate (called ‘auditing’) and make sure their clients pay the right amount of tax – but not too much.

19th-century accountants

For most of the 19th century there were few accountants. Only accountants working in banks or other large institutions could work full time. The rest worked in related jobs like law or real estate.

The Incorporated Institute of Accountants (IIA) was set up in 1894 to raise standards in accounting, and make the public more aware of the profession. In 1894 a rival organisation, the Accountants’ and Auditors’ Association (AAA) was set up. They thought the entry exams for the IIA were too difficult, and unlike the IIA at the time, they allowed women to belong.

New Zealand Society of Accountants

The New Zealand Society of Accountants (NZSA) was set up in 1908. In 2006 it became the New Zealand Institute of Chartered Accountants (NZICA). To become a full member of the NZICA people had to complete a university degree in accountancy.

Changes in accounting

By the 1960s some New Zealand accountancy firms had strong links to international firms. In 2009 the four biggest international firms – Ernst and Young, KPMG, PriceWaterhouseCoopers and Deloitte – were dominant in local business.

As well as offering advice on finances and tax, accountants now advised on things like managing business risks. In the early 2000s some accounts included information in financial reports on costs to the environment and social costs.

Rules were developed locally for accounting practice throughout the 20th century, but in 2007 New Zealand replaced these with the International Financial Reporting Standards. After the collapse of large international businesses, accounting requirements became more strict.

In 1989 the government introduced business accounting into government departments. Accounting was controlled by the independent Accounting Standards Review Board, set up in 1993, rather than by the government’s Treasury department.

More women became accountants. In 1987 they were 10% of all accountants but by 2009 they were 39%.

How to cite this page:

Philip Colquhoun, 'Accountancy', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/accountancy (accessed 20 October 2017)

Story by Philip Colquhoun, published 11 Mar 2010