Accountant in United Kingdom

Accountant’s in the Business Encyclopaedia and Legal Adviser

Based on the Business Encyclopaedia and Legal Adviser , by W.S.M. Knight, Barrister –at – Law.

An accountant is, apart from special agree ment, entitled to fair and adequate remuneration for any services he may render; having regard to any difficulty and importance of the work. In several matters, accountants act as general business agents and advisers, the remuneration is by way of commission where the services rendered are in respect of work usually done by agents for commission. Where the work is not so usually paid, or not by its nature capable of affording a basis for payment by commission, it is the practice of accountants to charge therefore in detail—their Bill being made up of separate items consisting of attendances, writing letters, drawing documents and so forth. The charges for these items should vary according to the position of the accountant, the position of his employer, and the difficulty and importance of the work. But as a rule the practice is to follow the usual charges of solicitors for the same services; the charges of an accountant, however, being generally less.

For ordinary investigations of accounts and for opening Books of Account, apart from special agreement, when near the accountant’s place of business, and exclusive of disbursements and stationery, the following wew the charges per day of seven hours in 1910 in England:—for the principal, 3 to 10 guineas; his managing clerk (when C.A. or I.A.), 2 guineas; his managing clerk (when not so qualified), 11 guineas; other clerks, 1 guinea. When the work is done at such distance from the accountant’s place of business as to render residence in the neighbourhood necessary, the charges per day would be :—for the principal, 5 to 20 guineas; his managing clerk (when C.A. or I.A.), 2 to 5 guineas; his managing clerk (when not so qualified), 1 to 3 guineas; other clerks, 1 guinea. For an investigation on behalf of a committee of shareholders :—principals, 7 guineas per day; managing clerk, 2 guineas; 1st class clerk, 1 guineas; other clerks, 1 guinea. For auditing the accounts of a private business or public company, the fees would be upon the same scale as those set forth above for ordinary investigations.

When an accountant acts as trustee in Bankruptcy, his remuneration would be by way of a commission upon the assets as realised and another commission upon the dividend paid. accordingly in an estate, the assets of which realised £500, and the dividend paid amounted to the same sum, the accountant would as a rule take 15 per cent. upon the assets and 10 per cent. upon the dividends—in all a remuneraration of £125, in addition to charges in respect of out-of-pockets. But the per centage of the commission decreases as the amount of the assets and dividend increases; so that if the assets were £25,000 and the dividend the same amount, the percentage would, as a rule, be 2/ per cent. on the former 2 per cent. on the latter—in all £1125. So, when an accountant acts as, or on behalf of, an assignee or trustee of an insolvent debtor under a Deed of Assignment or of Composition, he takes, apart from agreement, his remuneration in the form of a commission.

Without suggesting that the above charges are excessive, it is permissible to criticise them and venture the observation that in some cases, perhaps, the remuneration might be none too big; whilst in others where the debtor’s affairs were simple, small in extent and without complication, such a payment would be more than ample for proper and reasonable remuneration. It therefore would be wise for all creditors in bankruptcy and of insolvent debtors, to insist upon, as far as an agreed remuneration specially appropriate to the matter in hand.

May now be taken in either division of the (English) High Court for an account. The plaintiff should endorse his writ therefore, when if the defendant cannot satisfy the Court that there is sonic preliminary question to be tried, the plaintiff may obtain an order for proper accounts, with all the necessary inquiries and directions. It is usual to proceed with these in the Chancery Division. But a district registrar or a special or official referee may be appointed for the purpose. Even where the plaintiff does not so endorse his writ for an account, yet the Court, at any stage of the proceedings, may direct any necessary accounts to be taken, notwithstanding that there may be some further relief sought for, or some, special issue still to be tried. For further information on this subject generally and in special cases see, in general, the index, and titles such as Book Keeping.

Actuary

The officer of a life insurance company whose duty it is to advise upon all questions relating to their tariffs, rates of premium, and periodical valuations of assets and liabilities, in which the calculations are based upon mathematical science, the laws of probability, and the statistics of death and of survivorship, in combination with all the scientific formulae connected with interest of money and with commercial finance. In this sense the designation defines a distinct class of professional men, and, as such, it has long been used in the legislative enactments relating to life assurances and annuities, and to friendly societies. In the year 1884 the united members of this profession received a charter of incorporation from the crown, empowering the existing members of two societies theretofore known as the Actuaries Club and the Institute of Actuaries to combine under specified regulations, by the title of that institute, and the present and future members to affix the denoting letters of F.I.A. to their names.

The Journal of the Institute of Actuaries is published quarterly, and its twenty-eighth volume has already been reached. The earlier volumes bore the title of The Assurance Magazine. Its contents may with confidence be recommended to students, as embracing papers of the highest importance in connection with the doctrine, history, and practice of life assurance, and vital and other statistics bearing thereon and upon annuities, marine and fire insurance. The designation of actuary has also been long applied to certain officers invested with duties, more or less like the above, in savings banks and in government offices such as those of the commissioners for the reduction of the national debt, the war office, etc. It has also been applied in the last two centuries to the clerk to the convocation of clergy, but the name is in this case derived from his being the recording officer of the acts arising out of the deliberations of that ancient body, in the same way that the “actuar,” a functionary of the courts of justice in Germany, has to record and to see to the promulgation of their decrees. An account of the designation of actuaries in the case of public officers of other kinds in ancient Greece and Rome, may be read in Sir George Cornwall LEWIS’S Methods of reasoning in matters of Politics (see INSURANCE). F. H. AMTS. An expression of Roman law used to indicate the right of an adjoining owner to drive cattle and take carts over his neighbour’s land.[1]

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Notes

1. Robert Harry Inglis, Sir, Dictionary of Political Economy, Vol. 1, 1915

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Further Reading