or financial advice and tax planning guidance. This led to periodical auditing of the companies’ accounts. Reform laws and internal controls will be some of the main issues during the next two decades.Internal Controls: The Roaring 1920’s and the 1930’sAuditors were slow to change, but the book published in 1910 called, Audit Programs, shed light on the subject of internal controls. E. V. Spicer and E. C. Pegler talked about the concept to “ascertain the system of internal check” (Carmichael, Willingham, 1979). This was the beginning of the modern day auditor. When auditors and business managers learned about internal controls, they were able to evaluate an entity’s controls. Through this evaluation, they can do less detailed testing if the controls are strong, strong controls will save time and money. Mr. J. M. B. Hoxsey became the executive assistant to the Stock List Committee of the Stock Exchange Commission during the 1920’s. He did a lot of reforms during this reign (Staub, 1942). The Exchange was encouraging the preparation of financial statements published by listed corporation on the basis of sound accounting principle. The support of the Stock Exchange Commission was very helpful to accountants, who were in pursuit of improvements in corporate accounting practices.After the Stock Market Crash of 1929, the government saw the need for more standards and audits. They were needed to keep businesses and publicly traded securities to stay uniform and truthful with respect to their financial condition. The U.S. Government responded with the Securities Act of 1933, the Federal Trade Commission, and the Securities and Exchange Commission. These Federal laws focused on the balance sheet and the income (loss) statement that had to be filed with the Commission, and be certified by an independent accountant. Also the balance sheet had to contain all of the assets of the entity that conforms to the ...
