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Increased attention has been placed on the public accounting profession due to significant changes in the current capital market environment and, in particular, the recent and highly publicized failures and indictments of several Fortune 1000 companies and their executives. Legislators, regulators, company management, board members, audit committees and investors are focused on the important role of the public accountant and on opportunities to improve the corporate governance and financial reporting processes.

This paper provides a historical perspective on the evolution of the public accounting profession, as well as a summary of the self- governance and regulatory mechanisms in place that provide oversight to the practice of public accounting in the United States. The impact of recent legislation will be analyzed, and other ongoing initiatives designed to enhance the audit process and improve financial reporting will be summarized.

Italy may be the birthplace of accounting, but Scotland is the birthplace of the 'public' accountant. In the early 1800s, in the commercial centers of Edinburgh and Glasgow, individuals in the employ of merchants and solicitors often performed bookkeeping. Some of these individuals eventually established their own businesses and offered services relating to bookkeeping, drawing up financial statements, managing property and other 'accounting' services. In 1854, the Institute of Accountants in Glasgow successfully petitioned the Queen for the grant of a Royal Charter that would establish accounting as a profession. Soon afterwards, the Edinburgh Society of Accountants adopted the title 'Chartered Accountant', or 'C.A.', the designation still used in many countries today by someone qualified to practice public accounting

Public Accounting Firms A Fortune magazine article in 1932 entitled "Certified Public Accountants" documents the evolution of the accounting profession that continues today. This article notes significant growth of public accounting, stating the fundamental causes for growth are, "1) the immense expansion of American industryâ ¦requiring the most intricate accounting, and 2) the federal income tax becoming an ever more and more complicated game."

Source: www.deloitte.com

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