100 Years of the Journal

BY BARBARA J. SHILDNECK

The 19th century heralded the Industrial Revolution, whetting the interest of potential investors in reliable financial information. With the promise of free markets and the rise of large industrial corporations such as U.S. Steel, America’s first billion-dollar-asset company, society needed accurate information and the accounting services provided by CPAs. Accountants faced new challenges: They needed to deal with reporting issues and had to agree on a format that would render financial statements truly useful. The Journal of Accountancy, which came into being in November 1905, provided the forum for debate and discussion of these and other concerns of the profession.

The Journal of Accountancy ’s beginnings can be traced to the 1904 World Congress of Accountants in St. Louis. At this first meeting of its kind, George Wilkinson, an early leader, circulated copies of the September 1904 issue of a publication of the Illinois Society, The Auditor, as an example of the high-quality journal the emerging profession might establish.

“The record is clear: The Auditor was the prototype of our Journal ,” says accounting historian Richard Vangermeersh, PhD.

The 20th century can be viewed as a time the profession truly came into its own. When the era began, accountants numbered a few hundred; at its close, membership in the American Institute of CPAs was well over 300,000. The Journal’ s coverage of the period in between—in all 1,200 issues—testifies to the accounting profession’s key role in the developing U.S. economy.

An article in the first issue reminded accountants of their grave responsibilities to business. The author, Joseph E. Sterrett, an early president of the American Association of Public Accountants (a predecessor of the AICPA), was one of the first to commit his view of the profession to the printed page.

Sterrett saw accounting as “pre-eminently the profession of business advice” and the accountant as a person who “is thoroughly conversant with the principles” underlying a successful company and who “has accumulated a large fund of information in…business policy.” For 100 years this vision has been verified and amplified in the pages of the Journal .

THE EARLY DAYS
In the first decade of the 20th century, the Journal was the only U.S. publication through which CPAs could exchange ideas on business problems, and virtually the only vehicle for bringing accounting literature to the profession. The first volume of John L. Carey’s two-part history, The Rise of the Accounting Profession From Technician to Professional, 1896–1936 (AICPA, 1969), cited professional journals as “the best media for communication of new developments and new ideas…. The professional journal is authoritative [and] is one of the most important tools for the development of any profession.” In an article in the AICPA membership newsletter The CPA (1950), Carey said, “It might be claimed with some justice that the accounting profession’s greatest tangible asset is the Journal of Accountancy.

Early authors in the Journal were engaged in the effort to clarify the principles by which the fledgling profession would perform its duties. Writing in the first issue, Robert H. Montgomery said that “the recognition of accountancy as a profession, while gained in a marvelously short time when we consider its history, is yet so new a matter that it is difficult to define accurately the conditions which exist, and a far more onerous task to outline ideal standards.”

Those initial issues covered a broad range of subjects that still concern accountants today—the education and training of CPAs, the scope of the profession, the accountant as expert witness, advertising, independence, state legislation and the quest for a uniform CPA examination. The Journal also provided a platform for debates on different treatments of bond premiums and discounts, no-par stocks and interest expense before World War I.

Passage of the federal securities acts of 1933 and 1934 prompted CPA authors to focus on the profession’s responsibilities for certifying financial statements. An editorial in the May 1939 issue discussed an SEC opinion that dealt with “two questions of major importance to the accountancy profession—the primary responsibility of management for representations to investors and the responsibility of partners in accounting firms for careful review of the work done by their employees.”

World War II authors explored the CPA’s role in procuring war materials, establishing price controls and accounting for defense contracts. One postwar article, in October 1944, warned accountants to give “serious thought and attention” to wage stabilization rules so as “to render a valuable service to their clients in reducing violation penalties.”

Covers Through the Ages

1907

1939

1954

1969

1978

1989

2005

PRIMARY AGENTS OF CHANGE
Government. Three decades ago, the Journal covered a series of government hearings in Washington, D.C., held to examine the spate of business collapses and why the accounting profession’s standards had not been adequate to prevent them. Its articles and news pages kept readers abreast of the developments and their implications. Later articles and letters from readers discussed and debated AICPA committee initiatives—prompted in good part by the hearings—proposing tighter standards for the CPA’s scope of services.

Through the years, the Journal continued to keep members informed about important events and the implications of new legislation. The October 2002 issue, for example, featured an article on “what auditors and audit committees need to know and do to comply” with the Sarbanes-Oxley Act. It was the first of many articles that were to appear on the subject.

Technology. In 1965 computers catapulted from the technology lab to the business office. Automation—largely, electronic data processing (EDP)—posed serious questions for the profession. Journal authors debated the pros and cons of whether to lease or buy their computers and expressed concerns that banks would vie with CPAs to store basic business information. The Journal also considered the tremendous impact personal computers (PCs) were expected to have on the profession itself. By the early 1980s the rising number of businesses using PCs to consolidate financial data had propelled accounting firms to add EDP consulting to their list of services.

The first CPAs to experiment with PCs were eager to pass their knowledge along to help colleagues use the new technology, and practitioners relied on the Journal to publish how-to articles to keep them up to date. Computer-savvy CPAs continue to write for today’s JofA —and the monthly Technology Q&A column remains one of its most popular departments.

Advertisements From Years Past

1929

1939

1944

1969

THE FUTURE: THE SAME BUT DIFFERENT
The November 1980 issue commemorating the Journal’ s 75th anniversary covered many topics that still are on today’s hot list: financial accounting and auditing; financial statement transparency; government accounting and auditing; consulting; staff turnover and corporate hiring practices; accounting education and continuing professional education; personal financial planning; and corporate governance. Several articles in the issue discussed the ways the Journal had helped chronicle “the accountant’s changing role and need for technical services in a more demanding and complex world.” And a roundtable of AICPA executives discussed the issues expected to be foremost for the profession in the subsequent decade—including the use of computers, the likelihood of major changes in government accounting and how to provide the most useful guidance for local practitioners.

Philip B. Chenok, AICPA president at the time, summed up the roundtable this way: “Things that do not appear to us to be issues today may well become [so] over the next 10 years. For example, today’s emphasis on…auditor reports on internal control might not have been mentioned a decade ago. But then Watergate came along and had a profound effect on society and our profession.” Substitute Enron or WorldCom for Watergate, and that sentiment holds true today.

While many issues of 1980 are still relevant, others are new in commanding the profession’s attention—the multitude of changes the Sarbanes-Oxley Act has brought to the roles of CFOs, internal auditors and audit committee members; the impact of technology on all aspects of professional life; and the increasing need for guidance for CPAs in business and industry.

HOW IT LOOKED, THEN AND NOW
Early Journal covers listed article titles on a plain beige or gray background. The magazine size was the standard of the day—6 1 / 4 " x 9 1 / 4 ". Surprisingly, the original book-size format and very plain cover lasted until 1955, when the dimensions changed to that era’s larger-size standard and a variety of colors provided the backdrop for article titles. When a wave of slick new business magazines captured the market in the 1970s, the Journal had to compete for readers’ attention: It began by commissioning original and eye-catching cover art.

As the cover design changed, so too did the rest of the magazine. The pages of type grew livelier with the addition of a modest amount of black-and-white photography, then color photos and, finally, full-color graphics that added sophistication to the magazine’s appearance. Columns and special sections were added, replaced and expanded as members’ needs changed. For example, the Journal addressed its readers’ requests for more emphasis on small and midsize practices by increasing the number of articles written by local practitioners and by publishing more articles with practical advice.

In the early 1970s the Journal added the Official Releases section, which provides readers with the actual text of technical pronouncements. The column reinforced the JofA ’s recognition from its genesis as the profession’s journal of record and confirmed Carey’s reference to the Journal in his 1969 history as “probably the most widely read accounting magazine in the world.”

The Journal has stayed its course throughout its first 100 years. In Carey’s words, it was the “principal medium—virtually the only medium for many years—for the interchange of information, ideas and opinions among both schools and practitioners throughout the nation.”

The very first editorial encouraged readers to contribute as much material and advice as possible so the Journal could address the broadest concerns of the accounting profession and business society. The primary goal of all its editors has been to present readers with up-to-date, accurate material that is useful in the real world and easy to understand. (See “Quality at the Top,” a listing of all the Journal editors, at right, and “ Thirty Years at the Helm .”)

Today’s JofA continues to win accolades not only from the editorial advisers who review each issue but also in independent readership polls. A survey published by the Texas Society of CPAs in 2003 found that, when practitioners ranked accounting journals according to which ones they read and how frequently they read them, the Journal came out on top. And the magazine regularly wins prestigious awards for its content, design and readability (see page 82 for a list).

All those who have contributed to this publication—authors, editors, advisers, CPA leaders and readers—have unwaveringly pursued the goal of ensuring that the JofA addresses the key events and key documents of the past, the present and the future.

Barbara J. Shildneck, a former editor of the JofA , is now a contributing editor.

Quality at the Top
The Journal ’s Editors, 1905–2005

Joseph French Johnson (1905–11), dean of New York University School of Commerce, was chief editor. He was assisted by Edward Sherwood Meade (1905–06), director of the University of Pennsylvania’s Evening School of Accounts and Finance. Both were educators who tended to the publication on a part-time basis.

A. P. Richardson (1912–36) was a trained journalist, writer and editor who served as secretary of the American Institute of Accountants from 1911 to 1930. His book, The Ethics of a Profession, published in 1931, was the first in the country on the subject.

John L. Carey (1937–54) was appointed the AICPA’s chief staff executive after his stint of editing the Journal . Retiring in 1969 after 32 years of leadership and service, he is widely regarded as a dominant influence on the profession’s development in the United States. He was presented with the Institute’s highest award, the Gold Medal for Distinguished Service to the Profession.

John L. Lawler (1954–56) , Carey’s top staff adviser, succeeded him as editor. When he retired in 1976 as the AICPA’s administrative vice-president and secretary, the Institute established a literary award for the best Journal article of each year to honor his 26 years of service and his far-reaching contributions to the Journal ( click to see a list of Lawler Award winners ). He also received the AICPA Gold Medal for Distinguished Service.

Charles E. Noyes (1956–66), whose background had been in education and public affairs, was the AICPA public relations officer before becoming Journal editor.

William O. Doherty (1966–75), a professor of English literature at New York University, took the helm after directing the AICPA professional ethics division. He was coauthor with Carey of Ethical Standards of the Accounting Profession, published by the Institute in 1966.

Lee Berton (1975–83) was a seasoned financial reporter and writer who had originated the accounting beat at the Wall Street Journal. The author of award-winning articles covering business and financial topics, he was managing editor of Financial World before joining the Journal .

Barbara J. Shildneck (1983–87) was the first woman in the Journal’ s history to be named chief editor, following a number of other firsts: She was the first woman recruited to the magazine’s editorial staff and the first to be named managing editor. She came to the Institute in 1959 as a production trainee.

Colleen Katz (1988–present) arrived at the Journal with a strong background in magazine publishing: She worked for Woman’s Day, a national consumer magazine; was editor-in-chief of New Jersey Monthly, a regional publication; and was founding editor of Insurance Review, a business-to-business magazine for the property and casualty insurance industry. She continues at the JofA ’s helm with the added responsibilities of publisher, which she assumed in 1998.

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