AICPA - Evolution of a Profession

The American Institute of Certified Public Accountants (AICPA) was formed in 1887 and is celebrating its 125th anniversary in 2012. As part of the celebration, this short video (about 6 minutes), called “Evolution of a Profession,” reviews the history of the accounting profession from its origins 8,000 years ago to present day.

The future of corporate reporting: a review article (2000)

 

In a research article published in 2000, Professor Vivien Beattie noted that: “Significant changes in the corporate external reporting environment have led to proposals for fundamental changes in corporate reporting practices. Recent influential reports by major organisations have suggested that a variety of new information types be reported, in particular forward-looking, non-financial and soft information.”

This paper presents a review and synthesis of these reports and provides a framework for classifying and describing suggested information types. The academic antecedents for certain current proposals are identified and the ambiguous relationship between research and practice is explored. The implications for future academic research are discussed and a research agenda is introduced.

For additional insight, read the article “The future of corporate reporting: a review article” by Vivien Beattie published in the Irish Accounting Review 2000, 7(1), pages 1-36. As well, refer to the 1991 landmark research study called Information to be included in the Annual Report to Shareholders published by the Canadian Institute of Chartered Accountants (CICA). This 317-page study was drafted by J. Paul-Emile Roy, CA under the direction of a seven-member Study Group chaired by Gerald Trites, FCA.

Celebrating the AICPA's 125th anniversary

As noted in the previous posting, the AICPA has reached a remarkable milestone: being one of the few organizations to celebrate 125 years. The CPA profession has changed a lot during this period. Throughout the year 2012, the AICPA and its members will be celebrating this special anniversary and reflecting on the history of the CPA profession. Since people are what make a profession, members have been asked to submit their thoughts on what the AICPA means to them and the value of being part of a strong CPA profession.


To celebrate the AICPA's 125th anniversary, a new section of the website has been created. Numerous commemorative materials and activities have been developed to help members take a journey through the profession's history. The 125th celebration is as much a reflection of the past as it is an opportunity to envision what lies ahead. Much has changed in the last 125 years, and those changes have created today's profession. The current issues will create the profession of the future.

Listen to the video message from AICPA President & CEO, Barry Melancon, CPA, CGMA, commemorating the 125th Anniversary. Also, browse the 125th Anniversary edition of the Journal of Accountancy and Test your CPA history knowledge.

AICPA 125th Anniversary: Overcoming Challenges

The American Institute of Certified Public Accountants (AICPA) celebrates its 125^th anniversary in 2012. Founded in 1887, the AICPA is the national professional organization of Certified Public Accountants (CPAs) in the United States, with more than 350,000 CPA members in 128 countries in business and industry, public practice, government and education. It sets ethical standards for the profession and auditing standards for audits of private companies, non-profit organizations, federal, state and local governments. The AICPA’s founding established accountancy as a profession distinguished by rigorous educational requirements, high professional standards, a strict code of professional ethics, and a commitment to serving the public interest.

According to the AICPA Insights blog, the history of the profession includes a long tradition of successfully overcoming challenges. “Throughout our nearly 125 years, we have been a proactive profession that seeks out opportunities for growth and improvement. The latest example is CPA Horizons 2025, a landmark project that continues the valuable work of the profession’s Vision Process in the late 1990s and charts a course for the profession over the next 15 years. Among other key areas, Horizons 2025 focused on the increasing impact that technology will have on our world and on our profession. Since technology can automate so many of the tasks that we perform, it has allowed us to raise our game and reinforce our roles as trusted business advisors.”

In celebration of its 125th anniversary, the AICPA will highlight the CPA profession’s financial literacy expertise in a consumer-focused book. The book content will be a collection of personal essays showcasing the many ways CPAs transform financial lives. In this regard, the AICPA is looking for real-world saving and spending stories and tales of both money struggles and triumph to help families get a handle on their finances and teach good habits to children. The goal is to publish the book in the same style as the Chicken Soup for the Soul series in Fall 2012. That will coincide with the AICPA’s 125th anniversary and take advantage of the moment to highlight the CPA profession in the public. This book will be the AICPA’s first consumer publication and the first book published as part of the “360 Degrees of Financial Literacy” program.

Indiana CPAs - In the beginning …

Before there was a tax code (1913), before there was a Department of Labor (1913), before the SEC (1935) and before the PCAOB (2002), even before audits, there were CPAs (New York – 1896). How did the profession rise to the level of prominence in business without license to do something specific?

What were the requirements in 1915? Well … you had to be 21 years old, a high school graduate, have three years of experience as a professional accountant and submit “proof” of all of that to the newly created “state board of certified accountants”. Then, per Indiana law, “shall be granted without examination a certificate authorizing him to practice as a certified public accountant”. Of course this had to be done within 90 days. After that you would have had to take an examination. The early CPAs were grandfathered. That is how the profession got its start.

The first accounting standards were issued somewhere around 1938, and by 1959 there were 51 pronouncements known as Accounting Research Bulletins – this eventually became GAAP. The pronouncements were issued by the Committee on Accounting Procedure (CAP). The first auditing standards were issued in 1939 by the American Institute of Accountants committee on auditing procedure. In 1941, the SEC mandated that the auditor’s report had to be made in accordance with GAAP (they didn’t do that in 1935 because there was no GAAP).

To learn more, read the article “In the beginning …” posted on the Indiana CPA Society blog on February 16, 2012 by Gary Bolinger.

Generally Accepted Auditing Standards – 1975

Thirty-seven years ago, in February 1975, the CICA’s Auditing Standards Committee proposed, subject to comments received following exposure, to publish the contents of an Exposure Draft as CICA Handbook: Section 5100 - Generally Accepted Auditing Standards. This Exposure Draft was a re-exposure of material previously included in a November 1973 Exposure Draft. At that time the Committee used wording closely following and, in most places, identical to that used in the AICPA Statement on Auditing Standards No. 1, Codification of Auditing Standards and Procedures.

The Introduction said: "Although the Committee’s intention remains, as a general principle, to use words closely following AICPA Statements (or other professional pronouncements) in cases where this is appropriate, consideration of responses received to the 1973 Exposure Draft indicated that several significant changes were desirable in this particular case. The November 1973 Exposure Draft contained two other Sections of background material, which have been eliminated. "Responsibilities and Functions of the Independent Auditor" required extensive changes and will be dealt with at a later date. The discussion previously included under the heading "The General Standards" related to ethical matters [emphasis added], which are within the jurisdiction of the provincial Institutes and Order. Accordingly, it is the Committee’s intention not to deal further with this topic in the Auditing Recommendations Section of the CICA Handbook, other than including the substance of the three November 1973 general standards as one general standard in paragraph 5100.02 in the interest of completeness."

It is noteworthy that the Introduction also said that, oncurrent with the issuance of this Exposure Draft as an Auditing Recommendation, the Committee would intend to amend the Introduction to Auditing Recommendations by inserting the following as a new paragraph in the "Application" section:

"Among the Recommendations issued, GENERALLY ACCEPTED AUDITING STANDARDS, Section 5100, constitute the basic professional standards with which, in the Committee’s view, the auditor should comply when reporting upon financial statements. In adhering to such basic standards the auditor should have regard to the specific Auditing Recommendations in the Handbook while exercising his professional judgment [emphasis added] as to what procedures are required for such adherence. In addition, the Handbook provides Recommendations with respect to unaudited financial statements, to which Generally Accepted Auditing Standards do not apply."

A History of the AICPA and Volunteer Committees

The American Institute of Certified Public Accountants (AICPA) and its predecessors have a history dating back to 1887, when the American Association of Public Accountants (AAPA) was formed.  In 1916, the American Association was succeeded by the Institute of Public Accountants, at which time there was a membership of 1,150. The name was changed to the American Institute of Accountants in 1917 and remained so until 1957, when it changed to its current name of the American Institute of Certified Public Accountants. The American Society of Certified Public Accountants was formed in 1921 and acted as a federation of state societies. The Society was merged into the Institute in 1936 and, at that time, the Institute agreed to restrict its future members to CPAs.

The use of committees began even before the AAPA was formed in 1887.  At the first meeting of what would become the AAPA on December 22, 1886, those present authorized the appointment of a committee to draft rules and regulations.  Beyond this first preliminary committee, the first Bylaws of the AAPA in 1897 established three committees: Finance and Audit Committee, Committee on Elections, Qualifications and Examinations, and the Committee on Bylaws.  The number of committees grew continually over the years.

(For more information, see the AICPA website section on History of AICPA Volunteering.)

Approaches to Dealing with Risk and Uncertainty - 1990 CICA Research Report

The 1990 CICA Research Report, Approaches to Dealing with Risk and Uncertainty, was prepared by J.E. Boritz, PhD, FCA. He was assisted by an 8-member Advisory Group. This Research Report (about 160 pages) was developed in response to a recommendation in the Report of the Commission to Study the Public's Expectations of Audits (published in June 1988), commonly referred to as the Macdonald Commission Report.

The recommendation in  the Macdonald Commission Report stated that "the CICA should initiate and complete as soon as possible a study of risks and uncertainties leading to conclusions as to how they may best be disclosed in financial statements or elsewhere (e.g., in Management's Discussion and Analysis in the annual report)." Accordingly, the primary purpose of the Research Report is to discuss and summarize some of the key issues, and to recommend what further action should be taken.

Journal of Accountancy - archives from 1997

The Journal of Accountancy archives are available online dating from January 1997. Back issues can be selected using the "Browse By Cover" link or the "Select from Menu" link in the ISSUE ARCHIVE section of the homepage. A search feature is also available that allows users to "SEARCH - 1997 to Present."

Digital CPA Journal and archives (1989-2011)

The CPA Journal is now available online in digital format (with digital archives from January 2009). The full text of the CPA Journal is also online going back to 1989. Readers can lick on one of the years in the archive to browse the issues by month or use the search engine. In addition, article indexes for 2001 to 2011 are accessible by clicking on the appropriate year. Browse the CPA Journal Archives by year.

History of the AICPA

The American Institute of Certified Public Accountants (AICPA) and its predecessors have a history dating back to 1887, when the American Association of Public Accountants (AAPA) was formed. In 1916, the American Association was succeeded by the Institute of Public Accountants, when there was a membership of 1,150. The name was changed to the American Institute of Accountants in 1917 and remained so until 1957, when it changed to its current name of the American Institute of Certified Public Accountants. The American Society of Certified Public Accountants was formed in 1921 and acted as a federation of state societies. The Society was merged into the Institute in 1936 and, at that time, the Institute agreed to restrict its future members to CPAs. (Read more about the AICPA digital archives in the August 2007 Journal of Accountancy article "A Treasure Trove of Accountancy’s Past".)

University of Mississippi Libraries - Digital Accounting Collection

The University of Mississippi Libraries - Digital Accounting Collection contains several discrete collections, including the AICPA’s noncurrent exposure drafts and noncurrent Codes of Professional Conduct, a group of accounting pamphlets spanning the 20th century, a list of items donated by Peter McMickle, and a small collection of art and photographs. Many are full-text, while others are in bibliographic citation form only. The Academy of Accounting Historians has kindly given permission to publish the Accounting Historians Journal and the Accounting Historians Notebook.

A History of XBRL: The story of our new language

XBRL (eXtensible Business Reporting Language) is a royalty-free, international information format designed specifically for business information, also referred to as “interactive data” by the US Securities and Exchange Commission (SEC). The concept of XBRL is that all individual disclosure items within business reports are assigned unique electronically readable tags (like a barcode). These tags are mapped to taxonomies that are being developed by market constituents and are publicly available on the XBRL website. Taxonomies are, in essence, dictionaries of financial concepts in which each concept is defined and assigned a relationship to other concepts.

XBRL has been a journey of high and lows that met with great success in 2008. Success is defined as (1) the acceptance of this new tool in the broad-based business and business-reporting community and (2) the use of this tool in areas broader than just financial statement information. Those two fundamental beliefs grounded some early decisions that the American Institute of Certified Public Accountants (AICPA) believes will make XBRL a critical foundation for business and government in the decades to come. (Read the AICPA publication XBRL: The story of our new language.)