The 1917 Federal Reserve Bulletin article is revised a second time and published by the Institute as Examination of Financial Statements by Certified Public Accountants, superseding the 1929 edition. The SEC delegates its authority to set accounting standards to the American Institute of Accountants and its committee on accounting procedure. SEC Accounting Series Release no. 4 recognizes the standards used by private-sector accountants. The company president, who had been convicted of fraud under another name, is accused of taking part in forging documents.
Hearings investigate why the company's CPAs failed to discover the massive fraud.
1939 First auditing standard. Extensions of Auditing Procedures, recommends that auditors be present at inventory taking, that an audit might require a physical test and that auditor's get confirmations of inventories in warehouses and of accounts receivable. 1959 APB arrives. The Accounting Principles Board is formed to develop authoritative principles, but it is handicapped from the start. 1962 Investment tax credit stirs controversy.