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Accounting: Historical Perspectives

and the Securities and Exchange Act of 1934. The 1933 accounting still was not considered an appropriate career
act conferred upon the FTC the authority to prescribe the for most women. In fact, in 1950, only 15 percent of the
accounting methods for companies to follow. Under this more than 300,000 accountants in the United States were
act, accountants could be held liable for losses that women. Moreover, less than 4 percent of college students
resulted from material omissions or misstatements in reg- majoring in accounting then were women.
istration statements they had certified. The 1934 act In the 1960s, social and legal events began that ulti-
transferred the authority to prescribe accounting methods mately provided opportunities for women in the profes-
to the newly established Securities and Exchange Com- sion of accounting. As these events occurred, the overall
mission (SEC) and required that financial statements filed demand for accounting services and accountants also
with the SEC be certified by an independent public greatly increased. This demand became so large that the
accountant. traditional labor pool of men was not sufficient to main-
With the creation of the SEC and the passage of new tain the accounting work force. Concurrently, women
securities laws, the federal government assumed a central majoring in accounting increased dramatically from less
role in the establishment of basic requirements for the than 5 percent of all accounting majors in 1960 to more
issuance and auditing of financial reports. Additionally, than 50 percent in 1985.
these acts increased the importance of accountants and Given the increase of women accounting majors and
enlarged the accountant’s responsibility to the general the inability of the traditional labor pool to meet the work
public. Under these acts, not only did accountants have a force demand, accounting (especially public accounting)
responsibility to the public, they were now potentially increased the hiring of women. By 1990, women com-
liable for their actions. prised a majority of the accounting work force. It would
In 1938, the SEC delegated much of its authority to be the beginning of the twenty-first century, however,
prescribe accounting practices to the AIA and its Com- before women began to obtain a significant number of
mittee on Accounting Procedures (CAP). In 1939, CAP upper-level management positions in accounting.
issued its first of fifty-one Accounting Research Bulletins.
Responding to criticism of CAP, the AICPA (formerly the
THE TWENTY-FIRST CENTURY
AIA) in 1959 replaced the CAP with the Accounting Prin- The accountant, the accounting firm, and the accounting
ciples Board (APB). The APB was designed to issue profession of the twenty-first century are quite different
accounting opinions after it had considered previous from what existed at the beginning of the twentieth cen-
research studies, and in 1962, the APB issued its first of tury. In contrast to a bookkeeper manually recording
thirty-one opinions. Although the SEC had delegated entries in a large bound volume, an accountant is now
much of its standard-setting authority to the AICPA, the responsible for information concerning all facets of a busi-
commission exercised its right to approve all standards ness and is dependent on the latest technology for process-
when it declared that companies did not have to follow ing that information. In contrast to small local firms,
the rules set forth in APB No. 2, The Investment Credit.
accounting firms now can be large international organiza-
Responding to criticism of the APB, a study group tions with reported revenues of billions of dollars. In addi-
chaired by Francis M. Wheat was established to review the tion to the traditional audit/attest information,
board structure and the rule-making process. The com- accounting firms provide their clients with tax services,
mittee recommended that an independent, full time, financial planning, system analysis, consulting, and legal
more diverse standards board replace the APB. Following services. At the beginning of the twentieth century, the
the recommendations, the Financial Accounting Stan- accounting profession was just emerging. Today, the pro-
dards Board (FASB) was established in 1973. This board fession is comprised of thousands of men and women
is independent of the AICPA and issued its first statement working in public and private firms as well as profit and
in 1973. nonprofit organizations as members of management
teams or as valued consultants.
THE CHANGING GENDERIZATION
SEE ALSO Accounting
OF THE WORK FORCE
With the separation of bookkeeping from accounting, the
BIBLIOGRAPHY
demand for women bookkeepers dramatically increased,
Carey, John L. (1970). The Rise of the Accounting Profession to
and by 1930, over 60 percent of all bookkeepers were
Responsibility and Authority 1937–1969. New York: American
women. A similar increase in the demand for women Institute of Certified Public Accountants.
accountants, however, did not occur. Although World
Chandler, Alfred D., Jr. (1977). The Visible Hand: The Manager-
War II created some opportunities for women in account- ial Revolution in American Business. Cambridge, MA: Harvard
ing, at the start of the second half of the twentieth century University Press.

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