Accounting practices began developing in the US in the 1800s during the Industrial Revolution. Formal accounting organizations were established in the early 1900s, and the 1920s-1930s saw the founding of important groups like the American Society of CPAs and passage of acts regulating markets. Standards continued evolving through groups like the AICPA and FASB in the 1940s-1970s, responding to issues like taxes and fraud. Major reforms like SOX were implemented in the 2000s after high-profile accounting scandals to strengthen financial reporting and oversight.
2. History of U.S.
Accounting
2
• It is said that someone from the Bible
made an inventory of the gathered food
and received money all throughout the 7
years of aridity and death in Egypt.
• Contemporary accounting techniques and
measures were being utilized as early as
the American Industrial Revolution in the
1800s.
3. History of U.S.
Accounting
3
• Formal U.S. accounting may have started
when the American Association of Public
Accountants (AAPA) was established.
• The Federation of Societies of Public
Accountants was instituted in the early
1900s.
• A committee that would devise ethical
guidelines was formed by AAPA in 1906.
4. History of U.S.
Accounting
4
• The Federal Trade Commission was
formed after the legislation of the Clayton
Antitrust Act.
• The American Institute of Accountants
(AIA) was created in 1916.
5. U.S. Accounting
1920’s-1930’s
5
• The American Society of Certified
Public Accountants (ASCPA) was
founded in Washington.
• Several Revenue Acts were enforced
before the Great Depression started.
• The 1931 Ultramares case exemplified
the auditor’s liability in the event of
fraud or negligence.
6. U.S. Accounting
1920’s-1930’s
6
• The Securities Act of 1933 and the
Securities Exchange of 1934 were
legislated.
• The Securities and Exchange Commission
and the National Committee on Municipal
Accounting were formed.
• Institute Committee on Accounting
Procedure became the first U.S. accounting
standard-setting body for private sectors.
7. U.S. Accounting
1940’s-1950’s
7
• Institute of Internal Auditors was founded
and Income Tax Withholding commenced
• U.S. Government Accountability Office
formed its Corporate Office Division to
supervise government audits
• Committee on Accounting Procedure
released ARB 29 and ARB 32 while AIA was
changed to the American Institute of
Certified Public Accountants (AICPA)
8. U.S. Accounting
1960’s-1970’s
8
• APB’s accounting staff released the
Accounting Research Studies 1 and 3 while
the American Accounting Association (AAA)
released ASOBAT
• The Tax Reform Act was legislated and the
National Accounting Committee on
Government Accounting promulgated the
state and local government’s authoritative
GAAP
• SEC compelled a Management’s Discussion
and Analysis of Operations
9. U.S. Accounting
1960’s-1970’s
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• Big Eight Accounting Firms declared that they
had lost trust in APB due to extreme political
lobbying
• The International Accounting Standards was
established
• Equity Funding collapsed and the colossal
computer-based fraud was discovered
• Accounting Series Release 147 was issued
10. U.S. Accounting
1980’s-1990’s
10
• AICPA published the firs bill that standardized
the public accounting practice
• The Restructuring Professional Standards to
Achieve Professional Excellence in a
Changing Environment was issued by the
Anderson Committee
• The National Commission on Fraudulent
Financial Reporting or the Treadway
Commission detailed how financial frauds
could be curtailed
11. U.S. Accounting
2000 - Present
11
• Enron and WorldCom declared bankruptcy.
This was followed by other accounting frauds
which led to the legislation of the Sarbanes-
Oxley Act of 2002 (SOX).
• Accelerated filers were mandated to adhere
to SOX 404 by incorporating the external
auditor’s opinion on the efficacy of their
internal control over financial reporting.
• The Treasury Department created the
Advisory Committee on the Auditing
Profession.
12. U.S. Accounting
2000 - Present
12
• The FASB and the SEC issued guidelines on
fair-value accounting in 2008.
• FAF devised the Post-Implementation
Review Process, which is constructed to
assist the current actions of FAF Trustees in
assessing the efficacy of the FASB’s and the
Governmental Accounting Standards Board’s
(GASB) accounting standards.
• U.S. GAAP transitioned to IGAAP (IFRS).
13. Good fortune is what
happens when
opportunity meets with
planning.
- Thomas Alva Edison
13
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