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1969 Rise of the profession, v. 1. From technician to professional, 1896-1936.; John L. (John Lansing) Carey (1904-1987)

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Recommended Citation Carey (1904-1987), John L. (John Lansing), "Rise of the accounting profession, v. 1. From technician to professional, 1896-1936.;" (1969). Guides, Handbooks and Manuals. 30. https://egrove.olemiss.edu/aicpa_guides/30

This Book is brought to you for free and open access by the American Institute of Certified Public Accountants (AICPA) Historical Collection at eGrove. It has been accepted for inclusion in Guides, Handbooks and Manuals by an authorized administrator of eGrove. For more information, please contact [email protected]. The Rise of the Accounting Profession From Technician to Professional

1896-1936

Jtehii L. Carey The Rise of the Accounting Profession The Rise of the Accounting Profession From Technician to Professional 1896-1936

By John L. Carey Former Administrative Vice President American Institute of Certified Public Accountants

AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 666 FIFTH AVENUE , N.Y. 10019 Copyright 1969 by the American Institute of Certified Public Accountants, Inc. 666 Fifth Avenue, New York, N. Y. 10019 To ELIZABETH ARLISS NICHOLSON, whose contributions to the progress of the accounting profession can never be adequately acknowledged NOTICE TO READERS The author is solely responsible for the contents of this book. In publishing it the American Institute of Certified Public Accountants accepts no responsibility for the accuracy of factual statements or for the validity of interpretive comment. Table of Contents

Preface to Volume I ...... xv

Chapter 1 Present, Past and Future...... 1 The Present...... 1 A True Profession...... 3 The Rapid Rise ...... 4 The P ast...... 5 American Beginnings ...... 6 Problems Confronted ...... 7 Problems Ahead ...... 8 The Future...... 8 A Description of Accounting Practice...... 10

Chapter 2 How It All Began...... 13 Double-Entry ...... 14 Financial Statements ...... 14 The Corporation...... 16 Independent ...... 17 The Industrial Revolution...... 18 Professional ...... 19 Export to America...... 21 vii Chapter 3 Accounting Practice at the Turn of the Century .... 23 Nature of Accounting Practice...... 25 An Early Accounting Firm ...... 26 The British Invasion...... 27 Early American Firms...... 30 Out-of-Town W ork...... 32 Professional Pioneers...... 33 Chapter 4 The First “National" Association...... 36 Legal Base Lacking...... 39 Adventure in Education...... 40 The First CPA L aw ...... 43 The Struggle for Identification ...... 45 Lack of Technical Standards...... 47 The 1904 Congress...... 49 Chapter 5 The Impact of the Federal Government ...... 53 Panic and Regulation...... 54 Pressure for Financial Disclosure...... 57 Government Accounting ...... 58 Trust-Busting ...... 59 Differences With Government...... 60 The Federal Commission ...... 62 The Corporation Excise Tax ...... 64 The 1913 Income-Tax Law ...... 67 The Leaders Look to the Future ...... 71

Chapter 6 Emerging Professional Standards ...... 74 Accounting Terminology ...... 76 Responsibilities of Auditors ...... 77

viii Responsibility and Legal Liability...... 80 Qualified Certificates ...... 82 Disclosures ...... 83 Professional Ethics ...... 84 Companies ...... 87 B idding...... 87 Independence...... 88 Advert