Page 40 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.73, # 1, 2016, pp. 38-44

Pacioli described double-entry bookkeeping, and other commerce-related
concepts, in his book De Computis et Scripturis – translated in English to Of
Reckonings and Writings.
The book was translated into five languages within a century of initial
publication. The fundamentals of bookkeeping methods used today have actually
changed little since the days of Pacioli.
The modern, formal accounting profession emerged in Scotland in 1854 when
Queen Victoria granted a royal charter to the Institute of Accountants in Glasgow,
creating the profession of chartered accountant (CA). Today, the longest standing
societies of public accountants are found in Scotland.
In the late 1800s, chartered accountants from Scotland and Britain came to the
U.S. to audit British investments. Some of these accountants stayed in the U.S.,
setting up accounting practices and becoming the origins of several U.S. accounting
firms.
The first national U.S. accounting society was set up in 1887. The American
Association of Public Accountants was the forerunner to the current American
Institute of Certified Public Accountants (AICPA).
The Great Depression led to the creation of the Securities and Exchange
Commission (SEC) in 1934. Henceforth all publicly-traded companies had to file
periodic reports with the Commission to be certified by members of the accounting
profession. The American Institute of Certified Public Accountants (AICPA) and its
predecessors had responsibility for setting accounting standards until 1973, when
the Financial Accounting Standards Board (FASB) was established.
The industry thrived in the late 20th century, as the large accounting firms
expanded their services beyond the traditional auditing function to many forms of
consulting. The accounting profession in the 20th century developed around, at first,
state requirements for financial statement audits, and then around Federal requirements
created by securities acts passed in 1933 and 1934 (which created the Securities and
Exchange Commission), according to a July 1999 article in The CPA Journal.
In the 1970s, Congress and SEC demands for more reliable and comparable
financial reporting led to the founding of the Financial Accounting Standards Board
(FASB) in 1973. The FASB and the Governmental Accounting Standards Board
(GASB) are now two of the main organizations responsible for establishing
generally accepted accounting principles (GAAP) in the U.S.
Beyond the industry's self-regulation, the government also sets accounting
standards, through agencies such as the Securities and Exchange Commission and
laws such as the Sarbanes-Oxley Act of 2002, passed after the Enron and
WorldComm accounting scandals.

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