The First Century of the CPA

By Flesher, Dale L.; Miranti, Paul J. et al. | Journal of Accountancy, October 1996 | Go to article overview

The First Century of the CPA


Flesher, Dale L., Miranti, Paul J., Previts, Gary John, Journal of Accountancy


Public accounting was one product of the forces that transformed the United States in the late 19th century. The country moved from a primarily rural and agricultural society to one that was urban and industrial. Although the increased importance of Wall Street was a new force, the Main Street bankers in every town and hamlet were equally important as small businesses turned to their bankers for credit. These changes created a more complex social order, requiring the specialized knowledge of new professions.

One emerging profession was public accounting, whose members, like the characters in Frank Baum's contemporary classic, The Wizard of Oz, were in search of the yellow brick road to personal fulfillment. But in the accountants' case, the search involved the acquisition of income and status by winning acceptance for their auditing, management consulting and, later, taxation services.

THE PIONEERING PERIOD

The focal point of the efforts to organize the profession of public accounting was in New York City. Here, two rival organizations competed to create a framework for professional governance. First, there was the Institute of Accounts, an organization founded in 1882 that brought together public accountants, bookkeepers and businessmen interested in accounting. The membership was further unified by a nationalistic outlook supporting the post-Civil War reconciliation of the North and the South. Its leaders included Union Colonel Charles E. Sprague, an accounting theoretician and president of the Union Dime Savings Bank, and Major Henry Harney, formerly of Baltimore, who had served in Robert E. Lee's Army of Northern Virginia.

The rival American Association of Public Accountants (AAPA), founded in 1887, emulated the traditions of the British profession of chartered accountancy. Its founders included Edwin Guthrie, a chartered accountant, Frank Broaker, a correspondent for several British accounting firms, and Richard Stevens, whose family had founded the Stevens Institute of Technology in Hoboken, New Jersey.

Both organizations issued certificates of proficiency to their members. As early as 1884, the Institute of Accounts issued certificates based on passing an examination. The AAPA, the forerunner of the American Institute of CPAs, began issuing certificates in 1887 on the basis of experience. However, this early certification was limited because the organizations could not restrict practice by nonmembers. Legislation was needed to control the growing ranks of practitioners.

It was Henry Harney and Charles Sprague who wrote the original CPA bill that was submitted to the New York legislature. It was introduced in February 1895 but failed to emerge from a House committee and was defeated in the Senate. At the same time, another bill was being circulated by the AAPA. In March 1895, members of the rival organizations met to negotiate the differences between the two bills; the nationalistic bill from the Institute of Accounts was selected with one alteration: The provision requiring CPAs to be U.S. citizens was changed to allow individuals who planned to become citizens to be CPAs. Thus the British-dominated AAPA supported the Institute bill. In 1896, Frank Broaker led the profession's lobbying interests, and the bill passed by almost unanimous vote. It was signed by the governor on April 17, 1896. This law had a grandfathering provision allowing experienced practitioners to become CPAs without taking an examination.

In 1897, the first state CPA society, was established in New York under the charismatic leadership of Charles Waldo Haskins, a descendant of poet Ralph Waldo Emerson.

Within four years of the New York CPA law, Pennsylvania, Maryland and California passed similar legislation. By 1921, with passage of the New Mexico law, the professionalization of public accounting had spread throughout the nation.

In 1905, the AAPA merged with the Federation of Societies of Public Accountants in the United States (a loose connection of state accounting organizations) and kept the AAPA name; many CPAs viewed the merger as the first step in obtaining uniform national standards for the profession. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The First Century of the CPA
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.