American Institute of Certified Public Accountants
|Purpose||Accounting and Finance|
|Headquarters||New York, NY|
President & CEO
|Barry C. Melancon, CPA, CGMA|
|Tommye Barie, CPA (Oct. 2014 - Sept. 2015)|
Founded in 1887, the American Institute of Certified Public Accountants (AICPA) is the national professional organization of Certified Public Accountants (CPAs) 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.
The AICPA and its predecessors date back to 1887, when the American Association of Public Accountants (AAPA) 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.
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 (GMAPs). 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 (GAAP) to the newly formed Financial Accounting Standards Board (FASB). 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 (PCAOB) 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.
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 (ABV) designation. For financial planning, it is the Personal Financial Specialist (PFS) designation and for forensic accounting, Certified in Financial Forensics (CFF). The AICPA also offers an information technology credential, Certified Information Technology Professional (CITP). Beginning January 31, 2012, the AICPA in a joint venture with the Chartered Institute of Management Accountants (CIMA) began issuing the Chartered Global Management Accountant (CGMA) 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 (CICA); 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 (BBB On-Line, TrustE and VeriSign), 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 has spoken out in support of both the Digital Accountability and Transparency Act of 2013 (H.R. 2061; 113th Congress) and the Digital Accountability and Transparency Act of 2014 (S. 994; 113th Congress), 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 (eXtensible Business Reporting Language), which AICPA approves of. The Senate's version, S. 994, passed in both the House and the Senate in April 2014.
The AICPA is an affiliate of the Institute of Chartered Accountants of the Caribbean.
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.
- AICPA Code of Professional Conduct
- Center for Audit Quality (CAQ)
- Philosophy of Accounting
- About the AICPA
- Mendlowitz, Edward (June 2012). "Carousel of Progress". Journal of Accountancy (American Institute of Certified Public Accountants) 213 (6): 16. ISSN 0021-8448.
- Roberts, Thomas (22 October 1987). "The American Association of Public Accountants". The American Historians 14 (2): 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 (2007). 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 (2003). Knowledge and Information Technology Management: Human and Social Perspectives. Idea Group Inc (IGI). p. 276. ISBN 978-1-59140-072-1.
- Jagdish Pathak (2005). 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 (2009), p. 25 in preprint; final version at doi:10.1016/j.accinf.2009.10.002
- Lee, Danielle (10 April 2014). "Data Transparency Coalition, AICPA Applaud Senate Approval of DATA Act". Accounting Today. Retrieved 29 April 2014.
- Malancon, Barry C. (May 21, 2013). "Re: H.R. 2061 - The Digital Accountability and Transparency Act of 2013" (PDF). 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.