History of US Accounting Standards

By HughSil

  • Pressure to develop uniform accounting standards after stock market crash.

    In 1929, the stock market crashed and many people felt it was due to insufficient and misleading financial statement information. That caused stock prices to be inflated, which contributed to the stock market crash and the subsequent recession.

  • 1933 Securities Act

    The 1933 Securities Act set accounting and disclosure requirements for initial public offerings of stocks and bonds.

  • 1934 Securities Exchange Act

    The 1934 Securities Exchange Act mandated reporting requirements for companies who where publicly traded and it applied to the secondary market.

  • SEC is Created

    Apart of the 1934 Securities Exchange Act, the SEC was created. The SEC was given the power to set accounting and reporting standards for publicly traded companies.

  • Committee on Accounting Procedures is created

    In 1938, the Committee on Accounting Procedures, CAP, was created. It was the first private body to set accounting standards.

  • Accounting Principles Board replaces CAP

    In 1959, CAP is replaced by the Accounting Principles Board, APB.

  • Financial Accounting Standards Board replaces APB

    In 1973, the APB is replaced with the Financial Accounting Standards Board. It is due to the many limitations and failures of the APB.

  • FASB creates Emerging Issues Task Force

    In 1984, FASB created the Emerging Issues Task Force, EITF, to improve financial reporting by resolving financial accounting issues in the framework.

  • FASB creates the Accounting Standards Codification

    In 2009, FASB created the Accounting Standards Codification to organize accounting standards into an online organized research database.