Explaining the Jurisdictional Settlement Between Accountants and Actuaries: Standard Setting, Bureaucratization and Counterpart Units
In explaining these two aspects of the relationship between these professions, this paper explains how professional segments share the same governance objectives with respect to outcomes from standard setting through the concept of counterpart units (Simon, Thompson & Smithburg 1950:291 ff). In Simon et al’s account an overhead unit is in a hierarchical relationship of command relative to a line unit. In response to the creation of expertise within the overhead unit, for example a personnel department, the line unit creates its own group dealing with personnel. This new group is a counterpart unit to the personnel department within the overhead unit.
This paper extends the concept of counterprt unit to standard setting. Two bureaucratized professional segments support the attainment of consensus regarding governance. First, autonomously trained professionals working in bureaucratized settings support the autonomous professional segment setting standards. Second, professionals who are in principle bureaucratized have objectives conflicting with those of the autonomous professional segment setting standards in their profession. Relationships of subordination entail that one counterpart unit dominates the other. The introduction of standard setting processes relating to financial market governance changes this subordination relationship.
This paper suggests that, in contrast with the usual exclusive emphasis on standard setting by autonomous professional segments, bureaucratized professional segments play an important role in standard setting. It argues that the setting of governance standards can contribute to our understanding of the division of labour between accountants and actuaries. The implications for the role of governance in the expert division of labour need to be investigated further.
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