Definition: Abbreviation for American Institute of Certified Public Accountants, the national, professional organization that represents Certified Public Accountants (CPAs).
Example: When a financial crisis occurs, such as when Enron and Worldcom suddenly failed in the early 2000s, Congress inevitably holds hearings to find out what happened. As result of the testimony, Congress may conclude that it must make a law to change the way companies account for certain activities, and to hopefully prevent a similar failure from happening in the future. In order to determine the best course of action, Congress may want input from the accounting profession. In such an instance, the AICPA would send a representative to testify and speak for CPAs nationwide.
Investeach explains: Besides representing CPAs, the AICPA wants to ensure that the bar for becoming a CPA stays high and that achieving the CPA designation continues to be prestigious. It also helps qualified individuals in getting the education and experience they need to achieve the CPA certification. To learn more about the AICPA, visit aicpa.org.
The AICPA used to set the rules for how companies must account for and report their activities. Collectively, these rules are known as Generally Accepted Accounting Principles (GAAP). The AICPA maintained GAAP from 1936 to 1973. At that point, the independent Financial Accounting Standards Board (FASB) was formed to take responsibility for maintaining GAAP.
Finally, should CPAs believe that they need representation closer to home they can form associations at the state level. Most state CPA organizations are called societies. To find your state’s organization, perform a general internet search using the name of your state followed by *Society of CPAs*.
Riddle me this:
1. At what level does the AICPA represent CPAs?
2. Over what period did the AIPCA maintain GAAP?
3. Why isn’t the AICPA the only organization that represents CPAs?