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An International Meeting of American Accounting
Association
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Audit Companies: Condemnation, Proscription, and Disappearance of Public Accounting Firms Organized as Corporations in the United States Accounting Profession |
James J. McKinney
University of Maryland at College Park
Abstract: Audit companies, accounting firms often organized as corporations, were relatively widespread in the early twentieth century United States. Yet for more than half of the twentieth century these firms were condemned as unethical and were ultimately proscribed by the code of ethics of organizations such as the American Institute of Accountants, an AICPA predecessor. This paper discusses the early condemnation of these firms by prominent accounting leaders. The paper suggests that these attacks led to organizational, regulatory, and statutory proscriptions. The paper suggests that these proscriptions ultimately led to the disappearance of these audit companies.