The emergent Institute of Chartered Accountants of India: An upper- caste profession

1. Introduction

To date, the history of the accounting profession within India has attracted little attention from accounting history scholars (for exceptions, see Bose, 1988; Jaggi, 1970; Kapadia, 1972; Verma, 2010; Verma and Gray, 2006). ¹ This is to be regretted given the historical and contemporary importance of this nation in terms of its population size and its political, cultural and economic influence. To understand accounting’s evolution into a global profession first requires an understanding of the occupation at national levels. This is particularly so for those countries, including India, that have the capacity to exert international influence – whether on account of size, economic impact, or other factors. Additionally, India is an important site for understanding how the dominant professional and institutional structure of accounting that emerged in Great Britain came to be replicated throughout the globe, albeit with local variations.

One such local variation is the focus of this study. India’s traditional caste system endows it with a status hierarchy that has no direct counterpart in western society. As professionalisation itself can be viewed as a process of status acquisition, this study is thereby motivated by the expectation of some interplay between caste and the emergence of the organised accounting profession in India. This is particularly so given that most castes (or varnas) in India were traditionally tied to certain categories of occupations and this led to a strong nexus between work and social status. For example, members of the low “Chamar” caste were predominantly involved in work related to dead animals (in particular, removing and tanning skins), and the unpleasant nature of these tasks meant that both the work itself, as well as those who undertook it, were viewed as being of low status. ² However, more modern occupations, characterised by admission requirements (for example registration and/or educational qualifications) and compliance with codes of ethics, do not have such a traditional nor automatic association with only certain castes. ³ This study seeks to identify and clarify the interplay between caste and the emergence of one such modern occupation in India, that of professional accounting. In particular, the study focuses on the caste profile of the membership of the Institute of Chartered Accountants of India (ICAI) in 1953 – the earliest year for which a comprehensive membership list was available. The ICAI was formed just four years earlier in 1949 and immediately became the country’s dominant association of accounting practitioners, a status which it has retained through to the present day. This exploratory study takes the emergent accounting profession in India as its setting.

Traditional Indian society was divided into a large number of castes and sub-castes, each of which was characterised by a particular social and cultural identity (Beteille, 1969). ⁴ While formally abandoned under India’s constitution, the caste system continues to exert significant influence within Indian society. In order to assess and improve affirmative action programmes, in 2011 the government undertook the first “caste census” held since 1931 (Doherty, 2011). An individual’s caste determines his or her position in the social hierarchy, irrespective of economic status, and the system’s origins are likely to be at least partly explained by the division of labour. The practical implications of the caste system include monopoly, exclusion and oppression, and for this reason it has been denounced by a number of researchers, sociologists, scholars and religious reformers. ⁵

This exploratory study is distinctive in identifying and utilising a unique feature of Indian society – the caste system – in order to better understand the professionalisation of the accounting occupation in that country. As discussed in the following section, the professional project of accounting has been closely associated with themes of exclusion, particularly on the basis of social class, gender and race. The caste system of India is identified in this paper as an additional important and unique variable that shaped the emergent accounting profession in that country. ⁶

As well as revealing the caste profile of the early membership of the ICAI, based on the 1953 membership list, consideration is also given to the implications of the findings for furthering understandings of the emergent accounting profession in India. In pursuit of these objectives, the next section briefly summarises relevant theoretical concepts from the sociology of professions literature and identifies the exclusionary forces that have been identified as being influential in the professionalisation of the accounting occupation in various other locations. The third section then provides a more detailed exposition of India’s caste system. This is followed by a summary of the history of the accounting occupation in India. The fifth section presents and explains the data collected, based on the 1953 membership list. The sixth section then provides a more detailed analysis of this data and assesses the implications of the findings. The concluding section provides summarising comments, acknowledges the study’s limitations, and identifies opportunities for further research.

2. Professions: Key theoretical concepts

West (2003: 14) depicts professions as occupation-based groups that have achieved significant authority, to the extent that they typically exert some regulatory or oversight function in the domain in which they operate. Evetts (2003), in common with most authors, nominates tacit and technical knowledge, that is occupation specific, as providing the basis for such authority. Historically, professions were organized into institutional forms in response to social and economic changes related to the migration of population, the increasing importance of commerce and trade, the decreasing role of the Church, and the increasing role of the state in societal affairs (Lee, 1995). This focus on professions as institutions, and their formal organisations in particular, has been a dominant theme in the literature. However, Carnegie and Edwards (2001) argue that a focus on the formation of formal associations risks oversimplifying the whole process. Instead, they depict professionalisation as a dynamic process in which diverse “signals of movement” towards occupational ascendancy are evident both before and after the creation of an occupational association. Similarly, in their study of Victorian-era accountancy, Edwards and Walker (2010: 2) were guided by the “exhortations of sociologists of the professions who suggest that less attention be paid to the purely institutional dimensions of professionalism and more to the socio-cultural conditions of occupational advance”.

This study is consistent with this approach, in that it adopts a focus on a social hierarchy – the caste system – as a key variable in explaining and characterising an emergent accounting profession. Further, it is consistent with the notion that professionalisation typically benefits an already privileged band of practitioners. In this way, the study falls within the critical framework for studying professions, which is motivated by neo-Weberian and Marxist thought (Willmott, 1986). Professionalisation is depicted as a “project” driven by economic self-interest, but under the cover of claims to protect the public interest (Lee, 1995; also see Birkett and Evans, 2005). Market dominance, achieved through practices of explicit and implicit exclusion, provides the path to economic and other rewards, such as elevated social status (Larson, 1977; Macdonald, 1995; Willmott, 1986; West, 1996).

This approach rejects the functionalist notion that professional status is associated with the acquisition of certain attributes and is underwritten by an altruistic motive to serve society (Barber, 1963; Caplow, 1954; Carr-Saunders and Wilson, 1933; Durkheim, 1933; Goode, 1960; Greenwood, 1957; Tawney, 1921; Wilensky, 1964). It also extends beyond the interactionist approach, under which professions are viewed as “interest groups that strive to convince others of the legitimacy of their claim to professional recognition” (Willmott, 1986: 557; also see Becker, 1962; Bucher and Strauss, 1961; Dingwall, 1976; Haug and Sussman, 1969; Hughes, 1975; Roth, 1974). Rather, professionalisation is viewed as “an occupational strategy in which social groups attempt to control their place within the market” (Turner, 1995: 139). In pursuit of this objective, a variety of strategies and sources of power may be unleashed, and this includes excluding those who are perceived as diminishing the status of the occupation. Exclusionary forces that have been particularly to the fore in studies of the accounting profession have been gender, social class and race – what Mills (1993) describes as the “unholy trinity” of social differentiation.

The role of gender in the professionalisation of the accounting occupation has been identified and analysed by several researchers (Carrera et al., 2001; Cooper, 2008, 2010; Kirkham and Loft, 1993; Lehman, 1992), with Roberts and Coutts (1992: 389) summarising the key theme as follows: “For an occupation like accountancy, which was involved in a complex struggle to achieve professional status, the risk implied by feminization was too large a one to take”. Similarly, social class is a particularly prominent theme in studies of the emergence of accounting as a professional occupation in Britain (Briston and Kedslie, 1986; Kedslie, 1990a, 1990b; Macdonald, 1984, 1985; Walker, 1988, 1995) and is also identified as a determining factor in the United States (Lee, 2009) and Canada (Richardson, 1989). Kedslie (1990b: 13), for example, characterises the early members of the Society of Accountants of Edinburgh as being “predominantly upper to upper-middle class”, and notes that these social origins ensured that the Society itself “could not fail to gain immediate social status which was then imputed to subsequent members” (1990b: 15). More recently, a number of studies have observed a racial element in accounting professionalisation (Annisette, 1999, 2003; Bakre, 2005, 2006; Hammond, 1997, 2002; Hammond and Streeter, 1994; Hammond et al., 2007, 2009; Sian, 2006, 2007; Uche, 2002; Wallace, 1992). Annisette’s (2003: 639) seminal work on the accountants of Trinidad and Tobago typifies the tenor of this research: “the practice of professional accountancy has consistently excluded or if not, offered limited participation, to persons socially defined as ‘black’”.

The influential nature of the caste system within Indian society creates an expectation that it would have played an additional and distinctive role in the emergence of that country’s accounting profession, and that this will be evident in the early membership profile of the ICAI. As a preliminary to investigating this matter, an overview of the caste system is provided in the next section.

3. India’s caste system

The word “caste” is derived from the Portuguese word “casta”, which signifies breed, race or kind (Hutton, 1963). It is “a unique institution found only in India, and the functions which it has performed and still performs for Indian society as a whole are not found elsewhere” (Hutton, 1963: 115; see also Cox, 1945: 360). Risley (1908: 68) proposed the following definition of caste, based on his experience working as a British civil servant in India:

A caste may be defined as a collection of families or groups of families bearing [a] common name; claiming a common descent from a mythical ancestor, human or divine; professing to follow the same hereditary calling; and regarded by those who are competent to give an opinion as forming a single homogenous community. The name generally denotes or is associated with a specific occupation.

Consistent with this definition, the caste system has provided the fundamental basis of social stratification in India (Singh, 1976).

Extensive studies of the caste system have revealed it to be over 2,000 years old, but have failed to yield consensus as to its origins. ⁷ The 1931 Census of India mentioned five key theories (Hutton, 1963). First, the traditional explanation perpetuated through religious beliefs. The ancient Hindu text known as the Rig Veda outlines how the four varnas – from the upper caste Brahmans to the lower caste Shudras – were derived from a mythological ancestor: “The Brahman was his mouth; the Rajanya (Kshatriya) was made of his arms; the being called the Vaishya, was made of his thighs; the Shudra sprang from his feet” (Rig Veda, cited in Dutt, 1968: 31). ⁸ The second theory offers an occupational explanation (Nesfield, 1885), maintaining that castes originated from occupational groups that were subsequently organised into guilds (Ghurye, 1969). The remaining three theories, which are less widely supported, are based on notions of tribes (Ibbetson, 1910), race (Risley, 1908) and family (Senart, 1930). Hutton (1963) and Ghurye (1969) claim that there may be no single explanation for the origin of the caste system. Instead, they opine that some castes were derived from tribal or racial elements, others from occupations, while others have territorial or religious origins.

Regardless of the precise nature of its origins, the caste system has a profound interdependence with traditional occupations: “The varna system of India is essentially based on a classification of occupations” (Gupta, 1983: 191; also see Dumont, 1970; Ghurye, 1969; Ibbetson, 1910). As stated by Devi (1999: 199), “if one knows a man’s caste, one can tell his occupation”. As the learned class, Brahmans were traditionally assigned responsibility for teaching, study of vedas, worship and accepting alms. The key role of the second varna, Kshatriya, was to rule, lead, fight and protect the other three varnas. Vaishyas were assigned to commerce and trade and skilled crafts. Shudras, originating according to legend from the creator’s feet and thereby considered to be polluted, were expected to serve other castes and perform manual tasks of physical hardship. As stated by Weber (1967: 126), “Shudra indeed was a servant, but in principle, not a servant of a single individual, but of the community of the twice born”. ⁹

As the centuries passed, a fifth category in the caste system emerged, being that of the so-called “untouchables” or “outcastes”, also known as “depressed castes” or “Scheduled castes” (Barber, 1957: 80). This fifth stratum is considered a sub-category of the fourth varna of Shudra and was charged with occupational duties such as removing dead animals from villages, cleaning latrines, providing agricultural labour, sweeping streets and skinning carcases (The Untouchables of India, 1982). The often unpleasant nature of these tasks and a lack of access to hygiene led to those undertaking such work being literally “outcast”. That is, they were outside the system of social stratification and forced to live beyond village boundaries. Strict rules governed their entry to villages. While outlawed under India’s constitution, “untouchability” has persisted as a cultural practice. ¹⁰

The historical and continuing implications of the caste system in India are profound. As observed by Ghurye (1969), caste has traditionally been the prime determinant of social standing in India – in contrast to western society in which wealth, educational background, place of residence and a range of other variables may combine to specify class. Moreover, the caste system delivers a permanent social status, and its persistence and continuing importance was acknowledged by the Indian government in 2011 with its decision to undertake a “caste census” – the first in 80 years (Doherty, 2011).

As a necessary background to the data presented in section 5 – which focuses on the caste profile of the ICAI in 1953 – an overall caste profile of India at around that time is required. This was achieved by reference to Census reports, supplemented by data from the National Election Study of 2004. This data reveals a reasonably consistent caste profile extending back to 1871, particularly with regard to the Brahman caste. As revealed in Table 1, Brahmans have consistently comprised between just 5 to 6 per cent of the Indian population over a period of more than 100 years.

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Table 1.

Brahmans as a percentage of the total Indian population.

Year	1871	1891	1901	1911	1921	1931	2004
Percentage	5.3	5.9	5.8	5.7	5.5	5.4	5.0

Sources: 1871 to 1931 figures are taken from Census Reports of 1871, 1911, 1921 and 1931; 2004 figures are from the National Election Study 2004.

The Census Reports referred to in Table 1 provide less specific detail on each of the Kshatriya and Vaishya varnas (that is, other upper castes). However, they do reveal that, combined, these castes have comprised between 25 and 27 per cent of the Indian population. The range for the Shudra caste has been estimated at between 52 and 56 per cent. In summary, and as revealed by Census reports, during the course of the last century – and including the time at which the ICAI was formed – the caste profile of Indian society has been relatively constant as follows: Brahmans approximately 5 to 6 per cent of the total Indian population, Kshatriya and Vaishya around 26 per cent, and Shudra around 54 per cent. Non-Hindus make up the balance of around 15 to 16 per cent. The next section provides some context (Fleischman et al., 1996: 62) on accounting in India, as a background to the caste analysis of the ICAI presented in sections 5 and 6.

4. Accounting and the accounting profession in India

Organised trade and commerce has been a feature of Indian society for over two thousand years, reflecting the country’s large population, strategic location and abundant natural resources. As a consequence, accounting-related functions also have a long history in India, as evidenced in the work of Kautilya, an important diplomatic and political figure in ancient India who wrote about concepts of political economy in society in his text Arthaśāstra. This text also provided guidance on many accounting-related topics, such as taxation and profit measurement. ¹¹

According to Mattessich (1998a; 1998b), while systematic record keeping was undertaken in the much older civilisations of Sumeria and Babylonia, the Arthaśāstra of India is the first historical documentary evidence of ancient usage of modern accounting concepts and terms such as income, revenue, expenses, cost classification, assets, debts (negative numbers), capital, sales tax, work in process, finished products, production of by-products, long-term profit optimisation, insurance or risk distribution, and renting or leasing. Indeed, Mattessich (1998a: 200) states that “Arthaśāstra is the very first treatise on accounting, as far as present historical documentation goes”, and adds that its “description of accounting seems to have been more advanced in India than anywhere else at the time” (1998b: 138). During the reign of the Mughals in India (1526–1858), the concepts of traditional accounting were extended to the state revenue system and this persisted during the British era (Faruqee, 1999).

The development of modern professions in India was fostered by the imperial government in order to facilitate the administration and servicing of the colony, with an early example being the establishment of the Indian Medical Service in 1764 (Johnson, 1982). Developments in accounting paralleled many of those in Britain, with accounting practices being “introduced by early British merchants” (Johnson and Caygill, 1971: 157; also see Johnson, 1973; Parker 1989, 2005). A Companies Act was introduced in 1857 and was subject to major revisions in 1886, 1913 and 1936. ¹² The 1913 legislation introduced formal qualifications for company auditors and a Government Diploma in Accounting was started at the University of Bombay in 1918. ¹³ In relation to formal accounting associations, a Society of Auditors was formed in 1927 in Madras (Kapadia, 1972) and in 1932 the Indian Accountancy Board (IAB) was established (Johnson and Caygill, 1971; Kapadia, 1972). The first of these bodies did not achieve a prominent status as a practitioner association, while the latter was not initially intended to serve such a function. Rather, the role of the IAB was “to advise the governor general on all matters of administration relating to accountancy and auditing and to assist him in maintaining the standards of qualification and conduct of persons enrolled on the register of accountants” (Verma and Gray, 2006: 136).

The accountants serving on the IAB held out the hope that it would eventually “develop into an autonomous accounting profession in India, very much along the lines of the British model” (Verma and Gray, 2006: 136–137). This transformation to an independent but still British style of profession is a familiar one in the literature, having been explored by Miranti (1988, 1990) with regard to the USA, Annisette (1999, 2003) within Trinidad and Tobago, Sian (2006, 2007) in the case of Kenya, Bakre (2005, 2006) in Jamaica, and Yapa (2006) in Sri Lanka. Moreover, each setting is characterised by local nuances, and this is also evident in India. The IAB had not metamorphosed into an independent local association of practitioners by the time India achieved independence in 1949 and local accountants instead sought to realise their objective through the creation of a new body.

As detailed by Verma and Gray (2006), the formation of the ICAI involved a complex interplay between the aspiring profession and the state, which was represented in negotiations by the Ministry of Commerce and the Ministry of Finance. The dilemma faced by the local accountants in their quest for an independent but well-recognised professional association was a familiar one. The government could deliver immediate statutory recognition of an accounting association, but there was the risk that the price it would extract for its involvement would be interference in the form and function of the organisation. This was reflected in the negotiated compromise that saw the passing of the Chartered Accountants Act in 1949 and the creation of the ICAI six months later. While the Council of the ICAI included representatives elected by the membership, there was also provision for representation from the Ministry of Commerce and the Ministry of Finance, as well as from chambers of commerce (Verma and Gray, 2006: 137). As such, the ICAI could perhaps best be characterised as a “semi-independent” rather than fully autonomous professional body. However, it did prosper in the sense that it became and remains the country’s dominant association of accounting professionals. ¹⁴

Section 4 of the legislation creating the ICAI prescribed that persons would be entitled to have their name entered on the membership register based on their existing status as a registered accountant; completion of any training or examinations prescribed by the ICAI; or other “equivalent” examinations and training, including foreign qualifications. The provision to admit those already registered as accountants without further examination or other conditions positioned the ICAI as ready to capture the membership of existing (registered) accounting practitioners. Moreover, the Chartered Accountants Act (1949) provided a strong inducement for them to join, granting them entitlement to be “entered in the Register without the payment of any entrance fee” (Section 4). Although not fully independent of government, the ICAI had the potential to deliver the usual benefits associated with the creation of a professional association, including enhanced status and brand recognition, and existing registered accountants were best placed to exploit these advantages. A caste-based profile of the early membership of the ICAI is presented in the next section.

5. Data and preliminary analysis

The earliest membership list the ICAI was able to supply was that of 1953 (that is, just four years after formation). This listed a total of 2,394 members in the following four categories of membership: fellow in practice, fellow not in practice, associate in practice, and associate not in practice. ¹⁵ For the purpose of the analysis which follows, the Hindu members were identified on the basis of the distinctive characteristics of Hindu names, with non-Hindu Indian members and foreign members assigned to a separate classification. This is summarised in Table 2, with the general population percentages provided for comparison. This breakdown reveals that the relative proportions of Hindu/non-Hindu members of the ICAI were broadly similar to the general Indian population at that time. ¹⁶

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Table 2.

Hindu and non-Hindu membership of the ICAI (1953) compared to the general population (1951, 1961).

	ICAI Members (1953)		General population(percentages a )
Hindu/Non-Hindu	Number	Percentage	1951	1961
Hindu	1,982	82.8	84.0	83.4
Non-Hindu	412	17.2	16.0	16.6
Total	2,394	100.0	100.0	100.0

Source: ^aCensus reports of 1951 and 1961.

The Hindu membership was then categorised into the four Hindu varnas of Brahman, Kshatriya, Vaishya and Shudra. This classification was based on each member’s family name and was an extensive task, undertaken primarily by the first-named author, but in consultation with Indian sociologists, scholars, dalit (untouchable) writers and professors. Even so, there remained 7.8 per cent of Hindu names (6.4 per cent of the total members) that could not be assigned with confidence to a particular varna. In some cases, this was due to the member’s name not revealing any varna (for example the name “Agrawala”, which discloses only that the person originated from the city of Agra), while in other cases the member’s name did not clearly reveal affiliation with a single varna. The results of the classification are summarised in Table 3.

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Table 3.

Caste classification of membership of the ICAI (1953).

Hindu/Non-Hindu	Varna (caste) of Hindu members/nationality of Non-Hindu members	Number of members	Percentage of total members	Percentage of Hindu members for which varna could be ascertained
Hindu	Brahman	1220	51.0	66.8
	Kshatriya	238	9.9	13.0
	Vaishya	331	13.8	18.1
	Shudra	39	1.6	2.1
	Unascertained	154	6.4
Non-Hindu	Indian	263	11.0
	Foreigners	149	6.3
	Total	2394	100.0	100.0

The data reveals a particularly strong presence of Brahmans, who comprised just over half of the total membership. Vaishyas comprised the second most frequent varna, at 13.8 per cent of membership, followed by Kshatriya (9.9 per cent). The lowest status, Shudras, made up just 1.6 per cent of membership. Table 3 also shows the respective representation of the four varnas after excluding the 412 Non-Hindu members and the 154 Hindu members whose varna could not be ascertained. This again highlights the predominance of Brahmans, who comprised two-thirds of those members who had a caste that could be reliably identified.

Table 4 presents a further analysis of the 1953 membership in terms of membership categories, revealing an over-representation of Brahmans in the fellowship category of membership relative to their proportion of total membership. While Brahmans comprised 51 per cent of total membership, they made up, respectively, 60.3 per cent and 63.8 per cent of the fellows in practice and fellows not in practice.

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Table 4.

Membership categories by caste (1953).

Hindu/ Non-Hindu	Varna (caste) of Hindu members / Nationality of Non-Hindu members	Percentage of fellows (Total of 772 members)		Percentage of associates (Total of 1,622 members)
		In practice (725)	Not in practice (47)	In practice (971)	Not in practice (651)
Hindu	Brahman	60.3	63.8	47.3	45.2
	Kshatriya	10.9	6.3	9.4	9.8
	Vaishya	11.1	12.8	18.9	9.7
	Shudra	1.2	0.0	2.2	1.4
	Unascertained	3.9	4.3	7.7	7.5
Non-Hindu	Indian	9.1	10.7	10.4	13.9
	Foreigners	3.5	2.1	4.1	12.5
	Total	100.0	100.0	100.0	100.0

The significance of the data revealed in Tables 3 and 4 is made more evident when consideration is given to the proportion of India’s population belonging to the various castes, as detailed in Section 3. Relative to the general population, and based on the 1953 membership list, the key aspects of the data presented are as follows:

In summary, the creation of the ICAI in 1949 – and the beginning of the modern accounting profession in India – also marked the creation of a largely “upper caste profession”. The implications of this finding, along with some further analysis, are presented in the following section.

6. Implications and further analysis

The professionalisation of an occupation, including the formation of an occupational association, typically delivers significant benefits to its members. Even in the absence of a state-sponsored monopoly, there are branding benefits (for example “chartered accountant”) and likely market perceptions that the “qualified” have been distinguished from the “unqualified”. Further benefits may arise from the networking and professional development opportunities made available to members. In the case of the ICAI – formed by government initiative – any such benefits were predominantly delivered to an already elite group within Indian society, being the upper caste Brahmans. In this way, the formation of the ICAI helped perpetuate the traditional elite social and occupational status of this caste. This is not an unexpected outcome. As stated by Thapar (1978), in ancient and medieval India, occupations requiring reading and writing skills were primarily occupied by Brahmans. Similarly, and in more contemporary settings, Sarkar (1984) identifies that Brahmans have much more ready access to the formal education system compared to the other castes (especially the outcastes). They were, therefore, best placed to access “professional” occupations – that is, occupations dependent on formal education – in the post-independence era (Sarkar, 1984). However, the expectedness of this finding does not displace its significance: the professionalisation of the accounting occupation in India further privileged an already highly privileged group. Conversely, the private benefits which accrue from professionalisation were largely denied to those at the lower end of the caste stratum.

At a more nuanced level, there was a second group within Indian society that benefitted significantly from the formation of the ICAI. As noted above in Table 2, the non-Hindu membership of the ICAI in 1953 was proportional to the non-Hindu share of India’s total population at that time. However, this non-Hindu membership was not proportionately distributed among the different religious and ethnic groups comprising India’s non-Hindu population. “Parsis” represent a discrete ethnic group within Indian society whose origins are traced to Persia, from which they fled centuries ago when the spread of Islam threatened their Zoroastrian religion (Hodge, 2012; The Economist, 2012). Originally located predominantly within the states of Gujarat and Maharashtra, Parsis are now concentrated in the city of Mumbai. While adopting many aspects of local culture, they have still preserved their own ethnic identity and are sometimes referred to as “India’s Jews” (The Economist, 2012). In 1951, the year closest to 1953 for which data is available, the Parsi population was 111,791 (Unisa et al., 2008; Visaria, 2004) out of a total population for India at that time of 361 million. This indicates that they were at that time a very small minority, comprising just 0.03 per cent of the population. However, examination of the 1953 membership list of the ICAI reveals 223 Parsi members – that is 9.3 per cent of the total membership. ¹⁷ Relative to the general population then, Parsis were over-represented in the membership by a factor of more than 300 (compared to a factor of just 10 for Brahmans). While this is reflective of the traditional perception of Parsis as active and successful business people, it remains a novel finding: the notion of a particular ethnic group having a preponderant presence in accounting practice has no obvious parallel in western countries.

While the Parsis were clear beneficiaries of the formation of the ICAI, it is possible to identify a second category of non-beneficiaries (or those passively excluded) in addition to the Shudra caste. ¹⁸ Parsis aside, other non-Hindus, mainly Muslims, Sikhs, Christians and Buddhists, were also significantly under-represented in the ICAI membership. In the case of Shudras, their traditional exclusion from formal education inevitably and dramatically reduced their opportunity to participate in an occupation such as accounting. However, the traditional practice of excluding low-caste Hindus from formal education could not be enforced on non-Hindus. In fact, the birth and growth of many non-Hindu religions was often a response to deprivation imposed by the caste system and Brahmans. Sikhism, for example, is non-caste and condemns human inequality imposed on the basis of birth. The spread of non-Hindu religions in India can also be viewed as a response to the caste system, with most conversions to Buddhism, Christianity and Islam made by lower caste Hindus.

However, a change in religion obviously does not automatically precipitate a change in social, economic and educational status, and non-Parsi, non-Hindu Indians are significantly under-represented in the 1953 membership list. As shown in Table 3, there were 263 non-Hindu Indians, comprising 11.0 per cent of membership. As discussed above, however, the majority of these – 223 of the 263 – were Parsis. While constituting nearly 16 per cent of the Indian population according to the 1951 census, non-Hindu, non-Parsi Indians – most of whom were Muslim – made up just 1.7 per cent of the 1953 membership of the ICAI. This is consistent with the claims of Kapadia (1972) and Ansari and Aziz (1981) that registered accountants in pre-partition India were overwhelmingly non-Muslim.

One further aspect of the membership profile warranting further explanation concerns the relationship between the second and third varnas, respectively Kshatriya and Vaishya. As shown in Table 3, the highest ranking varna of Brahman had the highest membership share, while the lowest ranking Shudras clearly comprised the lowest proportion of membership. However, it was the third ranked Vaishya varna which had the second largest membership representation, at 13.8 per cent (or 18.1 per cent of Hindu members for which caste could be ascertained). The second ranked varna of Kshatriya had only the third largest membership share, at 9.9 per cent (or 13.0 per cent of Hindu members for which caste could be ascertained). A likely explanation for this is that the Vaishya varna encompasses the sub-caste of “Baniya”, a word originating from the Sanskrit “vanik” which means “trader” (Ghurye, 1969). As well as being the name of a sub-caste, the word Baniya is also used as a general term for traders and moneylenders (Hutton, 1963). Baniyas (particularly from Bengal) were known for their bookkeeping skills and early application of double-entry procedures (Scorgie, 1990; Scorgie and Nandy, 1992). Scorgie (1990) mentions that the thirteenth-century Venetian traveller Marco Polo was greatly impressed with the ability of Baniyas to keep accurate records of transactions. According to Bayly (1999), the Baniyas became prominent money lenders as part of the reorganisation of mercantile and financing activities in India during the colonial era. Given this background, it is perhaps not surprising that the Baniya sub-caste may have been particularly active within the emergent accounting profession.

7. Conclusions

The membership requirements specified in India’s Chartered Accountants Act of 1949 did not provide for any discrimination on the basis of caste, race or religion. However, the formation of the ICAI benefitted different elements of Indian society to different extents. The traditional system of stratification in India is one of caste or varna, and this study has sought to reveal the interplay between caste and the country’s emergent accounting profession. Using the earliest available membership list for the ICAI, that of 1953, the caste profile of members was studied. This revealed a significant over-representation of upper caste Brahmans, who comprised more than half of the membership in spite of constituting just 5 to 6 per cent of the Indian population. At the other end of the caste spectrum, Shudras – comprising more than half of the Indian population – made up less than 2 per cent of members. In addition to the Brahmans, the ethnic group of Parsis had a particularly strong presence in the emergent profession relative to their numbers in the general population. Non-Hindu, non-Parsi Indians were, like the Shudras, significantly under-represented. The third ranked varna of Vaishya had a higher membership representation than the second ranked varna of Kshatriya, a circumstance that may be explained by the Vaishya varna encompassing the traditional bookkeeping and trader caste of Baniya.

Two key and interdependent themes emerge from these observations. First, the benefits accruing from the professionalisation of the accounting occupation in India were disproportionately delivered to an already elite group: the Brahman caste. Indeed, the emergence of the ICAI appears to have been an exemplar of how traditional caste hierarchies could be perpetuated within modern occupations. Second, given the traditional focus on caste as the primary indicator of social status in India, the predominant Brahman presence in the emergent ICAI is posited as having been critical for its success. Any organisation without such a presence would, ipso facto, be condemned to a diminished social standing. In this way, the Brahman presence was important in enabling the replication of the British model of the accounting profession in India. Although subject to some local compromises – such as government representation on its Council – the ICAI was created with the template of the British accounting associations in mind. The relative success of that template in India was, however, contingent upon the caste profile of the nascent profession.

This has been an exploratory study which has sought to help redress the relevant neglect of India by accounting history scholars. It has also shed light on how a traditional and unique feature of traditional Indian society – the caste system – played a role in enabling the British model of the accounting profession to be replicated in India. It also, therefore, played a role in the evolution of accounting as a global profession. Caste is a location-specific exclusionary variable additional to those already emphasised in the literature dealing with the history of the professionalisation of the accounting occupation, namely social class, gender and race. While the main finding – that the upper-caste Brahmans were significantly over-represented in the early membership of the ICAI – is not unexpected, this study has clarified the extent of that over-representation and observed and quantified other aspects of the membership profile. The predictability of discrimination on the basis of gender and race has not precluded these variables from being important bases for studying professionalisation, and nor should the expectedness of the caste profile of the ICAI preclude its further study.

On the contrary, and consistent with its exploratory nature, the findings of this research reveal several opportunities for further inquiry. A limitation of the present study is that it focuses on a single membership list, that of 1953. Further studies which examine the membership profile on a longitudinal basis may reveal whether the caste bias which existed in India’s emergent accounting profession has been maintained. This would be of particular interest given the efforts made by successive Indian governments to improve the education and employment opportunities of members of the Shudra caste. Biographical studies of the small number of Shudras present in the 1953 membership would also be welcomed; how they managed to escape their traditional occupational destiny and join a modern profession may be particularly informative in furthering understanding of the interplay between caste and accounting in India. Finally, a call is made to shed more light on the intriguing case of the Parsis: an ethnic group identified as having a particular affinity with bookkeeping and accounting.