Founded in 1887, the American Institute of Certified Public Accountants is the
national professional organization of Certified Public Accountants in the
United States, with more than 400,000 members in 145 countries in business and
industry, public practice, government, education, student affiliates and
international associates. It sets ethical standards for the profession and
U.S. auditing standards for audits of private companies, non-profit
organizations, federal, state and local governments. It also develops and grades
the Uniform CPA Examination. The AICPA maintains offices in New York City;
Washington, DC; Durham, NC; and Ewing, NJ. The AICPA celebrated the 125th
anniversary of its founding in 2012. The AICPA’s founding defined accountancy
as a profession characterized by educational requirements, professional
standards, a code of professional ethics, and alignment with the public
interest. History
The AICPA and its predecessors date back to 1887, when the American Association
of Public Accountants was formed. In 1916, the American Association of Public
Accountants was succeeded by the Institute of Public Accountants, at
which time there was a membership of 1,150. The name was changed to the
American Institute of Accountants in 1917 and remained so until 1957, when it
changed to its current name of the American Institute of Certified Public
Accountants. The American Society of Certified Public Accountants was formed
in 1921 and acted as a federation of state societies. The Society was merged
into the Institute in 1936 and, at that time, the Institute agreed to restrict
its future members to CPAs. = History of Committees =
The use of committees began even before the AAPA was formed in 1887. At the
first meeting of what would become the AAPA on December 22, 1886, those present
authorized the appointment of a committee to draft rules and
regulations. Beyond this first preliminary committee the first Bylaws
of the AAPA in 1897 established three committees: Finance and Audit Committee,
Committee on Elections, Qualifications and Examinations, and the Committee on
Bylaws. The number of committees grew continually over the years. In the 1940s
there were 34 committees, by 1960, there were 89, and by 1970, the number had
grown to 109. In 1999, the nearly 120 existing
committees underwent a re-organization with approximately half of the standing
committees being replaced with a volunteer group model that placed an
increased emphasis on the use of task forces. The increased use of task forces
allowed for more targeted efforts with the task forces being given a specific
assignment then disbanding upon completion of that assignment. Also in
1999, the first tracking and management of task forces began. Collectively, more
than 2,500 volunteers contribute to the AICPA, fulfilling its mission.
Mission The AICPA's mission is "Powering the
success of global business, CPAs, CGMAs and specialty credentials by providing
the most relevant knowledge, resources and advocacy, and protecting the
evolving public interest." In fulfilling its mission, the AICPA works with state
CPA organizations and gives priority to those areas where public reliance on CPA
skills is most significant. In 2014 The American Institute of Certified Public
Accountants alongside the Chartered Institute of Management Accountants
created the Global Management Accounting Principles. The result of research from
across 20 countries in five continents, the principles aim to guide best
practice in the discipline of management accounting.
Professional standards setting The AICPA sets generally accepted
professional and technical standards for CPAs in multiple areas. Until the 1970s,
the AICPA held a virtual monopoly in this field. In the 1970s, however, it
transferred its responsibility for setting generally accepted accounting
principles to the newly formed Financial Accounting Standards Board. Following
this, it retained its standards setting function in areas such as financial
statement auditing, professional ethics, attest services, CPA firm quality
control, CPA tax practice, business valuation, and financial planning
practice. Before passage of the Sarbanes-Oxley law, AICPA standards in
these areas were considered "generally accepted" for all CPA practitioners.
In the early 2000s, federal public policy makers concluded that where
independent financial statement audits of public companies regulated by the
U.S. Securities and Exchange Commission are concerned, that the AICPA's
standards setting and related enforcement roles should be transferred
to a government empowered body with more enforcement authority than a
non-governmental professional association, such as the AICPA could
provide. As a result, the Sarbanes-Oxley law created the Public Company
Accounting Oversight Board which has jurisdiction over virtually every area
of CPA practice in relation to public companies. However, the AICPA retains
its considerable standards setting, ethics enforcement and firm practice
quality monitoring roles for the majority of practicing CPAs, who serve
privately held business and individuals. Credentialing
The AICPA offers credentialing programs in certain subject areas for its
members. The credentials are similar to state board certification for attorneys,
which also recognize subject matter specific expertise. The AICPA credential
for expertise in business valuation is the Accredited in Business Valuation
designation. For financial planning, it is the Personal Financial Specialist
designation and for forensic accounting, Certified in Financial Forensics. The
AICPA also offers an information technology credential, Certified
Information Technology Professional. Beginning January 31, 2012, the AICPA in
a joint venture with the Chartered Institute of Management Accountants
began issuing the Chartered Global Management Accountant credential.
360 Degrees of Financial Literacy The professional organization also runs
extensive public interest programs. One of the most important is an
award-winning program called 360 Degrees of Financial Literacy. The program,
launched in 2004, is a multi-faceted effort, spearheaded by the AICPA with
the support of state CPA societies. It encourages CPAs to take a broad
leadership role in volunteering to educate the American public, from school
children to retirees, on financial topics that apply to their particular
stage of life. This program has an extensive website with a variety of
financial literacy resources. WebTrust, SysTrust and SAS 70
WebTrust is a family of e-commerce assurance and auditing programs
co-developed by the AICPA with the Canadian Institute of Chartered
Accountants; accounting associations in the UK, Australia, New Zealand and Hong
Kong also participate in the program. A specialized variant of the program
exists for certificate authorities. A 2005 academic book noted that while cost
of a WebTrust seal is considerably higher than that of similar products
from its competitors, the scope of a WebTrust certification is more
comprehensive than those of its competitors, although this fact is
usually lost on consumers who have trouble differentiating such seal
programs, which explains the rather limited market penetration of WebTrust.
A 2009 academic paper which chronicled in some depth the adoption followed by
the abandonment of the WebTrust seal at a large US telecom company, noted that
the management did not find the cost-benefit tradeoff worthwhile: the
$100,000 per year cost for WebTrust being about twenty times higher than
that of a TrustE seal. Government relations program
The AICPA has a Washington office and a political action committee. On behalf of
its members, the AICPA monitors and advocates on legislative and other
matters that affect the accounting profession. Working with state CPA
societies and other professional organizations, the AICPA provides
information to and educates federal, state and local policymakers regarding
key issues. Whether serving as an information resource or offering
recommendations, the AICPA represents the profession while protecting the
public interest. The AICPA's Political Action Committee
is a contributor to U.S. Congressional representatives and Senators from both
parties who sit on various legislative committees of relevance to CPAs.
The AICPA has spoken out in support of both the Digital Accountability and
Transparency Act of 2013 and the Digital Accountability and Transparency Act of
2014, two bills in the 113th United States Congress. The AICPA said that
they believe the act "appropriately specifies a financial data reporting
standard that Federal agencies can implement using a currently available
nonproprietary computer language. Ultimately, the benefits of using data
standards to tag financial data will enhance the accuracy and transparency of
financial and performance information." The data standard being discussed was
XBRL, which AICPA approves of. The Senate's version, S. 994, passed in both
the House and the Senate in April 2014. External roles
The AICPA is a leading member of the International Federation of Accountants
and the Global Accounting Alliance. The AICPA is an affiliate of the
Institute of Chartered Accountants of the Caribbean.
Expulsion The AICPA can suspend or terminate
membership for failure to meet continuing professional education
requirements, felony criminal convictions, conviction for any part in
fraudulent filing of a tax return, or conviction relating to willful failure
to file a tax return. See also
AICPA Code of Professional Conduct Center for Audit Quality
FASB GASB
IASB Philosophy of Accounting
References ^ a b About the AICPA
^ Mendlowitz, Edward. "Carousel of Progress". Journal of Accountancy 213:
16. ISSN 0021-8448. ^ Roberts, Thomas. "The American
Association of Public Accountants". The American Historians 14: 116–124.
^ Constitution and by-laws with amendments January 19th, 1897
^ Volunteer Central ^ King, I. "New set of accounting
principles can help drive sustainable success". ft.com. Retrieved 28 January
2015. ^ Ferdinand A. Gul. Hong Kong Auditing:
Economic Theory and Practice. City University of HK Press. pp. 348–. ISBN
978-962-937-141-8. ^ A. Gunasekaran; Omar Khalil; Syed
Mahbubur Rahman. Knowledge and Information Technology Management: Human
and Social Perspectives. Idea Group Inc. p. 276. ISBN 978-1-59140-072-1.
icpa.org.hkwebtrust/faq_practitioner.php t-for-cas-certification-authorities.html
p:csrc.nist.govpki-twgy2000twg-00-24.pdf ^ Jagdish Pathak. Information Technology
Auditing: An Evolving Agenda. Springer. p. 57. ISBN 978-3-540-22155-5.
^ Emilio Boulianne, Charles H. Cho, "The Rise and Fall of WebTrust", La place de
la dimension européenne dans la Comptabilité Contrôle Audit, Strasbourg
: France, p. 25 in preprint; final version at
doi:10.1016/j.accinf.2009.10.002 ^ Lee, Danielle. "Data Transparency
Coalition, AICPA Applaud Senate Approval of DATA Act". Accounting Today.
Retrieved 29 April 2014. ^ Malancon, Barry C.. "Re: H.R. 2061 -
The Digital Accountability and Transparency Act of 2013". American
Institute of CPAs. Retrieved 18 November 2013.
^ "S. 994 - All Actions". United States Congress. Retrieved 28 April 2014.
^ "Members And Affiliates". ICAC. Retrieved 2011-07-01.
External links Official AICPA web site
The AICPA Collection at the University of Mississippi, Archives and Special
Collections Official WebTrust web site