Accounting for Success: A History of Price Waterhouse in America, 1890-1990
David Grayson Allen
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Set firmly within the larger context of American business history, Accounting for Success traces the evolution of the century-old, distinguished accounting firm of Price Waterhouse (PW). Allen and McDermott divide Price Waterhouse's history into three distinct periods. The first (1890 to the mid- 1920s) covers the establishment of the American outpost of a British parent and the Americanization of its practice. The second (the next forty years) highlights PW's rise to unrivaled professional leadership and the important role played by the audit. The third (the 1970s on) focuses on PW's response to the challenges brought about by the globalization of the economy, heightened competition among firms, and the growth of nonaudit services. The authors also address six central themes that recur throughout PW's history: the importance of the partner; the significant role played by the law in shaping the accounting profession's rights and responsibilities; the changing nature of accounting services; the continuously evolving and complex business environment; the highly visible role played by PW's leadership; and PW's worldwide approach to its business.
problem of liability and raised again the issue of PW's ownership structure. The case involved Standard Chartered, PLC, a London-based international bank and its claim of alleged losses following its acquisition in 1987 and its divestiture in 1988 of United Bancorp of Arizona, a PW audit client. Page 256 Standard Chartered sued PW, saying it was misled by the firm's audits of United Bancorp. In May 1992, ajury in Arizona agreed, and ordered PW to pay Standard Chartered $338 million in
5, 1978, 16F; D.R. Carmichael, "Corporate Accountability and Illegal Acts,"Journal of Accountancy 143 (January 1977): 77-78; Thomas E. McKee, "Auditing under the Foreign Corrupt Practices Act," CPA Journal 49 (August 1979): 31. 39. Biegler Interview, Part I; Eleanor Johnson Tracy, Peter J. Schuyter, and John F. Ince, "Accountants are Slugging it Out," Fortune 95 (June 1977): 40. According to reporter Frederick Andrews, Price Waterhouse had known of United Fruit's payment, but had decided to
Oliverio, "The AuditIs It a Commodity?" CPA Journal 56 (June 1986): 124, quoting Joseph Connor, 25; Fred L. Tepperman, "The Attest Function: Challenge of the Eighties," ibid. 51 (December 1981): 17; David Mosso, "Standards Overload, No Simple Solution," ibid. 156 (November 1983): 120; Christopher Power, "Canned Accountants," Forbes 133 (January 16, 1986): 123. 21. "A Solution to the Shopping Problem,"Journal of Accountancy 161 (June 86): 105; "Saying No to Shopping for Yes-Man CPAs,"
admitted into the Institute of Chartered Accountants of England and Wales in 1893. Dickinson then joined Lovelock and Whiffin, a small London firm, as a junior partner. During his years there, he traveled to the United States for a London company, the Riverside Trust Co., Ltd., which operated a 3,500-acre land development project in southern California engaged primarily in the production of citrus fruit. This investment venture had first attracted Wilson Crewdson, one of Dickinson's
PW ended this period as a professional organization that was better able to meet and resolve problems arising out of leadership transitions, the size of the partnership, and the morale of younger partners and staff. With these changes effected, and against the backdrop of accountancy's new and important role in American business life, PW strengthened its position as the profession's pre-eminent firm. Page 87 Chapter 4 A Golden Age, 1946-1961 As World War II came to an end,