An examination of the emergence and development of the acounting profession in developing countries: the case of Sri Lanka

This is an empirical investigation into the development of the accounting profession in Sri Lanka in the post-independence era. Taking the Institute of Chartered Accountants of Sri Lanka (ICASL) as a case, the study researches the accounting professionalization process during the past five decades (1959-2010). Thus, the study focuses on the struggles and interactions between competing groups and organisations within the accounting profession. The theoretical framework is drawn from the sociology of the professions and it is concerned with ‘class-based occupational closure’ in the accounting profession; this restricted entry and closed off opportunities for entry into the market by locally qualified registered accountants and later by the graduates of local universities from 1959 to 2010. It argues that Sri Lanka’s connection with Britain and continuing British interests in the post-independence period significantly impacted upon Sri Lanka’s business, social, political and educational spheres.<br><br>The methodological approach of this study draws heavily upon the “middle-range” thinking approach from Laughlin (1995) and Llewellyn (2003) on qualitative accounting research, using the case study method. Thus, the main data collection for this research was through oral history interviews and archival records. In addition, secondary sources such as published articles, relevant legislation, government reports, books and websites were reviewed.<br><br>As revealed, the objective of the establishment of the ICASL has been shifted from a supply of local professional accounting manpower requirements to control over the profession and professional accounting education, by marginalising university accounting education. As evidenced during the last fifty year period (1959-2010), the ICASL produced only 3,915 professional accountants. Many stakeholders claim that this number is inadequate for emerging business development. The major reason for lack of professionally qualified accountants in the country is partly due the fact that the ICASL’s resistance to university accounting education, an approach patterned on the British model. As a result the gaps in accounting services in corporate and other sectors are met by British professional accounting bodies such as ACCA and CIMA.<br><br>This suggests that the ICASL is losing its market share, as the British professional accounting bodies, CIMA and the ACCA, become the most popular accountancy bodies in Sri Lanka; thus capturing a major portion of the accountancy market. <br><br>Moreover the ICAEW entered the local market by signing an MOU with the ICASL in 2010, which are a perfect example of the British model and the re-emergence of ICASL’s preference to follow the elite tradition in the accounting profession.