Accounting for the journal's first 100 years: a timeline from 1905 to 2005.The century of American accounting the Journal of Accountancy has recorded so far has seen the growth of regulations, organizations and technological innovations. In contrast, during the previous 100 years, accounting and auditing practices developed in the near absence of authoritative requirements. The federal government in particular had relatively few programs or laws requiring accountants' involvement, there were very few professional accounting organizations, and most new technology affected areas outside accounting. As the timeline on pages 44-72 demonstrates, the years from 1905 to 2005 were filled with new activity in these areas. The AICPA AICPA See American Institute of Certified Public Accountants (AICPA). has had different names over the past century. For simplicity's sake, it is here often called "the Institute." 1905 * The Journal of Accountancy's first issue appears, based on an earlier journal of the Illinois Society of CPAs, The Auditor. * The Interstate Commerce Commission Interstate Commerce Commission (ICC), former independent agency of the U.S. government, established in 1887; it was charged with regulating the economics and services of specified carriers engaged in transportation between states. (created in 1887) seeks to set up a uniform system of accounting for the railroads. 1906 * The U.S. Census Bureau calls a conference on uniform municipal accounting that adopts a tentative schedule of standard accounts. * A committee of the American Association of Public Accountants (the AAPA--a predecessor of the AICPA) is appointed to help the federal Keep Commission introduce business methods into government, un important Progressive Era goal. This is on early instance of the federal government's use of professional accountants as official advisers. * The AAPA AAPA American Academy of Physician Assistants. forms a committee to create ethics standards for members. 1909 * A federal excise tax is levied on corporations. * Charles Kettering invents an accounting machine for the Notional Cash Register Co. 1913 * The 16th Amendment to the UIS, Constitution is ratified; permitting a federal income tax. * The Federal Reserve Act passes, establishing the Federal Reserve Board. 1914 * The Clayton Antitrust Act Clayton Antitrust Act, 1914, passed by the U.S. Congress as an amendment to clarify and supplement the Sherman Antitrust Act of 1890. It was drafted by Henry De Lamar Clayton. passes, creating the Federal Trade Commission. The FTC FTC See Federal Trade Commission (FTC). puts increased government focus on private sector audits and reporting and promotes official standards and independent audits. 1916 * The American Association of University Instructors in Accounting is founded (and renamed the American Accounting Association in 1935). * The AAPA changes its name to the American Institute of Accountants (AIA). In reorganizing, the group rejects the move toward federal licensing of accountants. 1917 * "Uniform Accounting," a project spearheaded by the AIA and published in the Federal Reserve Bulletin, is the first guidance promulgated by any professional accounting body. * The AIA's governing council approves eight rules of professional conduct and a model CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. law. * The AIA offers state accountancy boards a written examination for use in testing entrants to the profession. 1919 * The National Association of Cost Accountants, the predecessor of today's Institute of Management Accountants The Institute of Management Accountants (IMA) is a professional organization headquartered in Montvale, New Jersey consisting of over 70,000 members worldwide. The IMA is dedicated to advancing the role of the management accountant and financial manager within the business (IMA (Interactive Multimedia Association, Annapolis, MD) An earlier trade association founded in 1988 originally as the Interactive Video Industry Association. It provided an open process for adopting existing technologies and was involved in subjects such as networked services, scripting ), is formed. Early 1920s * The AIA, under some pressure from the Treasury Department, bans contingent fees and most advertising. 1921 * John Cromwell, a New Hampshire accountant, becomes the first black CPA. * With the passage of CPA legislation in New Mexico, all states in the union al that time now have such laws. * The American Society of Certified Public Accountants is founded. The ASCPA tries to stop the sale of CPA credentials and is oriented to state-level authority und multiple accounting services, while the AIA focuses on national authority and has an East Coast and auditing orientation. The two organizations ultimately merge in 1936. * The federal Budget and Accounting Act passes, creating the General Accounting Office (today called the Government Accountability Office The Government Accountability Office (GAO) is the audit, evaluation, and investigative arm of the United States Congress, and thus an agency in the Legislative Branch of the United States Government. ) and the Office of Management and Budget The Office of Management and Budget (OMB), formerly the Bureau of the Budget, is an agency of the federal government that evaluates, formulates, and coordinates management procedures and program objectives within and among departments and agencies of the Executive Branch. . 1922 * Beta Alpha Psi BAΨ (Beta Alpha Psi) is an honorary organization for accounting, finance and information systems students and professionals. Its primary objective is to encourage and recognize academic and professional excellence in the financial information field. , the student accounting honor society, is formed. 1924 * The federal Board of Tax Appeals is created as an entity independent of the Treasury Department. 1928 * IBM introduces the 80-column, machine-readable punched card that will be in standard use for the next half-century, handling a wide range of accounting operations. 1929 * The stock market crashes. The Great Depression begins. Over the next four years, U.S. industrial production plunges by 50%, the money stock drops by 28% and the number of banks falls by 25%. 1931 * The Ultramares case defines accountants, liability in cases of negligence and fraud. It opens the door for shareholder lawsuits by upsetting the widely accepted idea that accountants could be held liable for negligence only by those with whom they had a contractual relationship. 1932 * Ivar Kreuger, the "Match King"--an influential proponent of financial secrecy for corporations--dies and his pyramid stock swindle is uncovered. His securities were the mast widely held in the world; his company's bankruptcy becomes the biggest to date. * The New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. requires its listed companies to have audits. 1933-34 * The American Woman's Society of CPAs is founded. A survey finds there--are 105 female CPAs. * The New Deal creates extensive new banking regulations and federal programs requiring accounting oversight. * The Securities Act of 1933 and the Securities and Exchange Act of 1934 pass. The Securities and Exchange Commission is created to regulate financial markets. Carman Blough is appointed SEC chief accountant. Leading accountants successfully oppose proposals for the government to oversee business directly or conduct audits of public companies. Instead, the new laws require independent audits but also limit accountants' control over accounting standards. 1934 * The New York Stock Exchange requests the AIA's advice on financial statement formats. * The National Committee on Municipal Accounting is organized to develop integrated accounting and reporting standards for state and local governments. 1936 * The phrase "generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting " is first used in an AIA report, "Examination of Financial Statements." 1938 * The Institute Committee on Accounting Procedure (CAP) effectively becomes the first U.S. accounting standard-setting body for the private sector. 1939 * The SEC S highly publicized investigation of the McKesson & Robbins fraud discovers the auditors had not confirmed accounts receivable or verified the existence of inventory. In response, the AIA sets up a standing committee to issue pronouncements on generally accepted auditing standards Generally Accepted Auditing Standards, or GAAS, are ten auditing standards, developed by the AICPA, consisting of general standards, standards of field work, and standards of reporting, along with interpretations. . The AIA's Committee on Accounting Procedure publishes the first Accounting Research Bulletin. * Iowa professor John Atonasoff designs the first working model of on electronic digital computer, using vacuum tubes. 1940 * The American Accounting Association publishes William Paton and A. C. Littleton's Introduction to Corporate Accounting Standards, which defends and establishes historical cost valuation end the matching principles in accounting literature. 1941 * The Institute of Internal Auditors “IIA” redirects here. For IIA in decision theory, see Independence of irrelevant alternatives. Established in 1941, The Institute of Internal Auditors (IIA) is an international professional association of more than 128,000 members with global headquarters in is founded. 1941-45 * IBM produces more than 5,000 accounting machines used in Washington and overseas for military logistics. * The United States begins income tax withholding. IBM creates the W-2 form and the equipment to track withheld taxes. * Wartime wage and price controls are imposed, requiring extensive cost calculations. * An excess profits tax excess profits tax, levy on any profit above a standard level. Chiefly a wartime phenomenon, it is intended to increase revenue during periods of distress and to prevent businessmen from taking unfair advantage of the increased government spending and consumer demand with a marginal rate of 93% is levied. The individual income tax changes from a "class tax" to a "mass tax." * The accounting profession thrives. In 1940 there is one professional accountant for every 406 U.S. workers; by 1950 there is one for every 283 workers. 1945 * The GAO establishes the Corporate Audits Division to oversee government audits and names CPA T. Coleman Andrews Thomas Coleman Andrews (February 19, 1899 – October 15, 1983) was an accountant and a candidate for President of the United States. Andrews was born in Richmond, Virginia. After high school, he worked at a meat packing company in Richmond. as its first head. 1948 * The National Committee on Municipal Accounting is reactivated, is renamed the National Committee on Governmental Accounting, and publishes 18 pronouncements on state and local accounting over the next 20 years. 1948-51 * The first fully electronic stored-program computers--true computers in today's terms--are set up in England. Soon afterwards, America's first commercial computer, UNIVAC 1, is delivered to the Census Bureau. Very large corporations also use UNIVAC 1, which can perform 2,000 calculations per second. 1950 * The Accounting Hall of Fame is established at The Ohio State University Ohio State University, main campus at Columbus; land-grant and state supported; coeducational; chartered 1870, opened 1873 as Ohio Agricultural and Mechanical College, renamed 1878. There are also campuses at Lima, Mansfield, Marion, and Newark. . 1953 * The CAP publishes the first codification d GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). in Accounting Research Bulletin no. 43. * T. Coleman Andrews becomes the first CPA to head the Internal Revenue Service. Mid-1950s * Arthur Andersen designs and installs a computer-controlled payroll system for General Electric, one of the first business systems applications of a computer. * GE creates ERMA, Electronic Recording Machine Accounting, for the Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. , a major accounting improvement for the banking world. 1956 * The Commission on Standards of Education and Experience for CPAs issues the Perry Report, which recommends o five-year professional accounting degree as qualification to become a CPA. 1957 * The American Institute of Accountants renames itself the American Institute of Certified Public Accountants With over 330,525 CPA members (in August 2006), the American Institute of Certified Public Accountants (AICPA) is the largest professional organization of Certified Public Accountants (CPAs) in the United States of America. . 1959 * The Accounting Principles Board The Accounting Principles Board (APB) is the former authoritative body of the American Institute of Certified Public Accountants (AICPA). It was created by the American Institute of Certified Public Accountants in 1959 and issued pronouncements on accounting principles until 1973, replaces the CAP as the Institute's authoritative financial accounting body. * The Special Coordinating Committee to Study the Report of the AICPA Commission on Standards of Education and Experience for CPAs recommends a postbaccalaureate (five-year) education requirement for the CPA certificate. This recommendation is subsequently endorsed by the AICPA council. 1962 * APB Opinion no. 2 is issued to defer the new investment tax credit's effects on income statements. Corporate managers, the Treasury Department and many congressional representatives overwhelmingly oppose it and, in 1964, the SEC declares companies need not implement it. 1965 * Congress passes a law allowing CPAs to represent clients before the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. . * Congress creates Medicare and many other Great Society programs involving very complex cost allocations. * The accounting profession continues to thrive; there is one professional accountant for every 294 American workers in 1960, but by 1970, there is one for every 197 workers. * The American Accounting Association (AAA AAA: see American Automobile Association. (Triple A) A common single-cell battery used in a myriad of electronic devices of all variety. Like its double A (AA) cousin, it provides 1.5 volts of DC power. When used in series, the voltage is multiplied. ) recommends accounting professors have doctorates. 1966 * The AAA issues A Statement of Basic Accounting Theory (ASOBAT), which proposes evaluating accounting information based on its relevance, verifiability, freedom from bias and measurability, and says such information should be oriented to the user. 1967 * The AICPA and the Carnegie Corp. issue Horizons for a Profession, which recommends a common body of knowledge for accounting students and a five-year education requirement. * The Department of Defense creates ARPANET (Advanced Research Projects Agency NETwork) The research network funded by the U.S. Advanced Research Projects Agency (ARPA). The software was developed by Bolt, Beranek and Newman (BBN), and Honeywell 516 minicomputers were the first hardware used as , eventually linking computers across the country and leading ultimately to the creation of the Internet. 1968 * The Tax Reform Act of 1968 changes the focus of the income tax from economic incentives to social objectives. * The National Committee on Governmental Accounting publishes authoritative GAAP for state and local governments: GAAFR (governmental accounting, auditing and financial reporting). 1969 * The National Association of Black Accountants is organized in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . 1970 * The Penn Central Railroad experiences the largest bankruptcy to date. * The AICPA issues Statement of Auditing Procedures no. 49, requiring auditors to report on internal controls. * The Accounting Principles Board issues Opinion nos. 16 and 17 on accounting for business combinations and goodwill. These prove so controversial that three of the Big Eight firms notify the AICPA they have lost confidence in the APB APB See Accounting Principles Board (APB). . 1971 * The American Accounting Association calls for an alternative to the Accounting Principles Board. 1972 * The AICPA endorses its Wheat committee's (Report of the Study Group on the Establishment of Accounting Principles) call for an alternative to the APB. * The GAO publishes Government Auditing Standards (the "Yellow Book"). * The AICPA rescinds its ban on advertising. 1973 * The Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). replaces the APB. * The International Accounting Standards Committee International Accounting Standards Committee was founded in June 1973 in London and replaced by the International Accounting Standards Board on April 1, 2001. It was responsible for developing the International Accounting Standards and promoting the use and application of these is formed. (It is renamed the International Accounting Standards Board  An editor has expressed concern that this article or section is .Please help improve the article by adding information and sources on neglected viewpoints, or by summarizing and in 2001). * The AICPA publishes the Trueblood committee report, Objectives of Financial Statements, which says providing corporate information to outside users is the primary purpose of financial reports. * Equity Funding collapses and its massive computer-based fraud is discovered. As a result, auditors may no longer "audit around the computer." 1974 * AICPA appoints the Commission on Auditors' Responsibilities (the Cohen cohen or kohen (Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. commission) in response to the Equity Funding and other scandals. The Cohen report concludes, in 1978, that there is an "expectations gap between what auditors do and what the public expects of them. 1975-78 * The first widely used PCs appear: the MITS Altair 8800, followed by the Apple and Apple II. 1976 * Congress's Moss and Metcalf committees conclude their wide-ranging investigation of accounting and auditing. They recommend increased federal regulation of the profession and a government takeover of private sector standard setting. 1977 * The Foreign Corrupt Practices Act Foreign Corrupt Practices Act An amendment to the Securities Exchange Act created to sanction bribery of foreign officials by publicly held US companies. Foreign Corrupt Practices Act forbids American companies to bribe any officials of foreign governments and requires that corporations keep extensive records of transactions for disclosure purposes. * The AICPA creates an SEC Practice Section and a Private Companies Practice Section, both of which implement self-regulation, including peer review and quality control. Soon, the Public Oversight Board is set up to oversee the SEC Practice Section. * The International Federation of Accountants  The external links in this article or section may require cleanup to comply with Wikipedia's content policies. is formed. 1978 * The SEC's Accounting Series Release 250 compels companies to disclose the ratio of nonaudit to audit fees. The next year, ASR (Automatic Speech Recognition) Using voice recognition to replace keypad entry for telephone voice menus. Typically used to speak the digits 0 through 9 insted of keying them, ASR systems may be able to recognize a limited vocabulary. See voice recognition and AVSR. 264 attemps to restrain the provision of nonaudit services to audit clients. Both are later rescinded. 1979 * The Federal Trade Commission and the Department of Justice ask the AICPA to revise its Code of Conduct by ending its ban on direct uninvited solicitation, arguing the ban is a restraint on trade. * SSARS no. 1, the first statement on standards for accounting and review services, defines reviews and compilations and prescribes the form of reports to be issued. * VisiCalc, the first electronic spreadsheet software, is introduced. 1982-83 * Lotus 1-2-3 revolutionizes accounting for small and midsize businesses. 1984 * The Single Audit Act requires a comprehensive single audit for state and local governments receiving federal money. * The AICPA and the National Association of State Boards of Accountancy For the technique in nucleic acid amplification, see . The National Association of State Boards of Accountancy (NASBA) is an umbrella group for the 55 state boards that regulate the accountancy profession in the United States of America. publish the first joint model bill to regulate the practice of public accounting, later known as the Uniform Accountancy Act. * The Governmental Accounting Standards Board The Governmental Accounting Standards Board (GASB) is currently the source of generally accepted accounting principles (GAAP) used by State and Local governments in the United States of America. replaces the National Council on Governmental Accounting. 1985-88 * After the gigantic collapse of the savings and loan savings and loan n. a banking and lending institution, chartered either by a state or the Federal government. Savings and loans only make loans secured by real property from deposits, upon which they pay interest slightly higher than that paid by most banks. industry, Rep. John Dingell (D.-Mich.) holds a series of hearings investigating whether the government should take over the issuance of accounting standards and oversight of auditors. 1986 * The Tax Reform Act of 1986, one of the most far-reaching reforms of the U.S. tax system since the inception of the income tax, is signed into law. * The Anderson committee issues its report, Restructuring Professional Standards to Achieve Professional Excellence in a Changing Environment, in response to concerns over the profession's ability to serve the public interest and retain public confidence. * The American Accounting Association publishes the Bedford Report, which is critical of accounting education. 1987 * The AICPA celebrates its 100th anniversary. The Journal of Accountancy issues o special AICPA centennial issue in May. * As part of the Plan to Restructure Professional Standards, Institute members vote to amend the bylaws to require, among other changes, that all members who audit publicly traded companies work for a firm that is a member of the SEC Practice Section. * The National Commission on Fraudulent Financial Reporting (popularly known as the Treadway commission) reports on how fraudulent financial management can he reduced and how auditors con reduce the "expectations gap" between themselves and the public. * The AICPA introduces the Personal Financial Specialist credential. 1988 * The AICPA approves the requirement of 150 hours of education for new members after 2000. * Members approve the AICPA bylaw that makes the existing voluntary peer review program mandatory. 1990 * The Federal Accounting Standards Advisory Board The Federal Accounting Standards Advisory Board (FASAB) is a United States federal advisory committee whose mission is to develop generally accepted accounting principles for federal financial reporting entities. is created. In 1999 the AICPA council will recognize the FASAB as o body entitled to establish GAAP standards for federal government entities. 1991 * The World Wide Web is launched. 1994 * The AICPA Special Committee on Financial Reporting (the Jenkins committee) proposes a business reporting model. 1995 * The Institute launches the CPA Vision Project, a grassroots initiative to define the future of the profession. 1996 * For the first time, more AICPA members are employed in industry than in public accounting firms. 1997 * The AICPA offers the first exam for its Accredited in Business Valuation credential. 2000 * The AICPA introduces the Certified Information Technology Professional Certified Information Technology Professional (CITP) is a Certified Public Accountant recognized for their technology expertise and unique ability to bridge the gap between business and technology. designation. 2001 * Enron restates its earnings back to 1997 and files for bankruptcy protection. The firm of Arthur Andersen will collapse due to its association with Enron. A verdict of obstruction of justice A criminal offense that involves interference, through words or actions, with the proper operations of a court or officers of the court. The integrity of the judicial system depends on the participants' acting honestly and without fear of reprisals. against the firm is overturned in 2005 by the U.S. Supreme Court. 2002 * WorldCom's accounting fraud is discovered, land the company files for bankruptcy protection. * The Sarbanes-Oxley Act is passed. Among other changes, it creates the Public Company Accounting Oversight Board The Public Company Accounting Oversight Board (or PCAOB) (sometimes called "Peekaboo") is a private-sector, non-profit corporation created by the Sarbanes-Oxley Act, a 2002 United States federal law, to oversee the auditors of public companies. to set public company auditing standards. 2004 * The PCAOB issues its first auditing standards for public companies. * A new computerized Uniform CPA Examination, focused more on research skills and problem salving, replaces the paper-and-pencil version. * FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). amends Statement no. 123 an compensatory stock options to eliminate alternatives to expensing the options and to bring American rules closer to international accounting standards. 2005 * The Journal of Accountancy begins its second century. What will it record about the profession in the next 100 years? Stephanie Moussalli, PhD, is an assistant professor of accounting at Nicholls State University Nicholls State University, founded in 1948, is a public university located in Thibodaux, Louisiana, USA. Nicholls State is part of the University of Louisiana System of universities. Originally called Francis T. in Thibodaux, La. |
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