Accounting Principles Board (APB), 93
Accounting research bulletins (ARBs), 93
Accounting research studies (ARSs), 94
Adelphia, 138–139
Agricultural Adjustment Act (AAA), 76
American Accounting Association (AAA), 109
American Institute of Certified Public Accountants (AICPA), 57
American taxes
colonial taxes, 28
evasion and scams, 35–37
federal tax source, 28
income taxes
1862 Tax Act, 31
Clayton Antitrust Act, 32
congressional forecast, 30
depreciation rules, 32–33
Office of Internal Revenue, 31
Payne-Aldrich Tariff Act of 1909, 32
reform legislation, 31
Revenue Act of 1913, 32
Roosevelt years, 33
Social Security Act of 1935, 33
tax-writing committees, 30
post-World War II period
corporate income tax rates, 36
federal revenues, 34
individual tax and capital gains rate, 36
payroll taxes, 34
state and local revenues, 34
tax rate, 34–35
Tax Reform Act of 1986, 35
Tax Relief Act of 2010, 35
viable fiscal system, 28–29
Whiskey Rebellion, 29
Arithmomether, 158
Audit opinions
after regulation, 17, 19
before regulations, 17, 18
market regulation (see Market regulation)
PCAOB
financial audit report, 20
internal control report, 21
public policy and government accounting (see Public policy and government accounting)
Statement on Auditing Standards, 17
taxes and funding public policy (see Taxes and funding public policy)
Auditing
American accountants
audit engagements, 6
certified public accountant, 6
generally accepted accounting principles, 8
Price Waterhouse firm, 8
regulations, 8
staff-to-partner ratio, 6
standardized audit process, 8
Tabulating Machine Co., 6
audit, 1
certified public accountant, 1
Committee on Auditing Procedure, 10
computer-assisted audit techniques, 10–11
consulting, 11–12
early auditing, 2
english experience
balance sheet audit, 5
Bankruptcy Act, 4
British accountants, 4
British Companies Act of 1844, 4
government-bureaucratic-judiciary structure, 3
industrial revolution, 3
Institute of Chartered Accountants, 4
professional accountant, 3–4
South Sea Co., 3
failures, 2
internal auditing, 15–16
legal responsibilities and regulation
Emergency Loan Guarantee Board, 13
equity funding, 13
Foreign Corrupt Practices Act, 13
litigation rules, 14
regulatory problems, 13–14
securities rules, 12
SOX and new PCAOB rules, 14–15
modern auditing, 9
NYSE firms, 9
Securities and Exchange Commission, 9
Auditing Standards Executive Committee (AudSEC), 10
Bankruptcy Act, 4
Binary Automatic Computer (BINAC), 160
Black-Scholes model, 148
British Companies Act of 1844, 4
Budget and Accounting Act of 1921, 47
California Public Employees’ Retirement System (CalPERS), 128–129
Case-Shiller Index, 150
Certified of Internal Auditor designation (CIA), 16
Certified public accountant (CPA), 1
Chief Financial Officer Act of 1990, 48
Clayton Antitrust Act, 32
Collateralized debt obligation (CDO) market, 149
Committee on Accounting Procedure (CAP), 80, 93
Committee on Auditing Procedure (CAuP), 10
Commodities Futures Trading Commission (CTFC), 132
Community Reinvestment Act of 1977, 147
Comprehensive annual financial reports (CAFRs), 41
Comptometer, 159
Computer-assisted audit techniques, 10–11
Computing-Tabulating-Recording Company (CTR), 159
Congressional Budget Office (CBO), 48
Consumer Financial Protection Agency (CFPA), 153, 154
Control Data Corp. (CDC), 163
Corruption, 83
Digital Equipment Corporation (DEC), 165
Dow Jones industrial average (DOW), 92
Electronic Numerator, Integrator, Analyzer, and Computer (ENIAC), 160
Emerging Issues Task Force (EITF), 95
Federal Accounting Standards Advisory Board (FASAB), 48
Federal Communications Act (FCC), 77
Federal Deposit Insurance Corporation (FDIC), 77, 152
Federal Emergency Relief Administration (FERA), 76
Federal Housing Act (FHA), 77
Financial Accounting Foundation (FAF), 54, 94
Financial Accounting Standards Advisory Committee (FASAC), 95
Financial Accounting Standards Board (FASB), 90, 95–96
Financial accounting standards setting, 106–107
accounting theory
capital maintenance, 111–113
CF project, 110
conceptual framework summary, 111
earnings measurement, 111–112
economic income, 108
expense recognition, 112
financial assets and liabilities, 112–113
Moore’s A Statement of Accounting Principles, 109
Statement of Basic Accounting Theory, 110
Trueblood Committee, 110
allowances and reserves, 108
comprehensive income, 108
double entry, 105
fair value, 113–115
future issues, 117–118
income statement, 107–108
International Accounting Standards, 115–117
inventory example, 109
title passing, 108
Foreign Corrupt Practices Act, 13
Generally accepted accounting principles (GAAP), 8, 51
Glass-Steagall Act of 1933, 77
Global Crossing, 137
Government Accountability Office (GAO), 138–139
Government Accounting Standards Board (GASB), 54–55, 95
Governmental Accountability Office (GAO), 47–48
Grover Norquist’s Americans for Tax Reform, 26
Information technology
accounting applications, 171–172
early computing, 158–159
future aspects, 177
International Business Machines
Control Data Corp. (CDC), 163
Defense Calculator, 161–162
Digital Equipment Corporation, 165
fourth generation computers, 165
RCA BIZMAC, 163
second generation computers, 163–164
Selective Sequence Electronic Calculator, 161
System/360 (S/360), 164
systems knowledge, 162–163
UNIVAC, 162, 163
internet, 170–171
mass communication, 157–158
Moore’s Law, 172–173
networks, 169–170
personal computer
Apple II, 166
business programs and calculations, 166–167
first PC models, 165–166
graphical user interface and Microsoft, 168
hardware and software, 166
IBM PC, 167–168
Macintosh, 167
microprocessor, 166
xerox set up, 166
Stone Age, 160–161
Institute of Internal Auditors (IIA), 16
Internal audits (IAs), 15–16
Internal Revenue Service (IRS), 27, 58
International Accounting Standards, 115–117
International Accounting Standards Board (IASB), 116–117
International Accounting Standards Committee (IASC), 115
International Business Machines (IBM), 159
Control Data Corp. (CDC), 163
Defense Calculator, 161–162
Digital Equipment Corporation, 165
fourth generation computers, 165
RCA BIZMAC, 163
second generation computers, 163–164
Selective Sequence Electronic Calculator, 161
System/360 (S/360), 164
systems knowledge, 162–163
UNIVAC, 162, 163
International Financial Reporting Standard (IFRS), 117
Internet, 170–171
Interstate Commerce Commission Act of 1887, 56
Market regulation
big business, 68–69
Committee on Accounting Procedure, 80
crash, 71–73
economy recovery, 69
FDR’s new deal, 76–77
Franklin D. Roosevelt era, 63
generally accepted auditing standards, 80
Harding’s “return to normalcy” campaign pledge, 62, 67
inefficient competitors, 62
laissez faire government, 66
manipulated stock price, 70
New York Stock Exchange, 62, 70, 71
Pecora Commission
committee counsel, 74
preferred lists, 75
tax-avoidance schemes, 75
unethical banking and investment practices, 75
post-Civil War period, 61
reform and government regulation, 63
Roosevelt and Wilson attempt reform, 63–64
Securities and Exchange Commission, 78–79, 81
speculation, 70
Teapot Dome Scandal, 68
Woodrow Wilson administration, 61–62
World War I and beyond, 65–66
Mass communication, 157–158
MicroStrategy, 139
Moore’s Law, 172–173
Mortgage-backed securities (MBSs), 148
National Labor Relations Board (NLRB), 77
National Recovery Administration (NRA), 76–77
Netscape, 170
Networks, 169–170
New York Stock Exchange (NYSE) firms, 9
Nonprofit (NP) organizations
American Institute of Certified Public Accountants, 57
budgeting, 57
characteristics, 57
charity organizations, 57
FASB Statement, 57
future aspects, 177
Internal Revenue Service, 58
net assets, 57–58
non-governmental organizations, 58
technical problems, 58–59
Office of Internal Revenue (OIR), 31
Office of Management and Budget (OMB), 47
Payne-Aldrich Tariff Act of 1909, 32
Payroll taxes, 34
Pentagon’s Advanced Research Projects Agency network (ARPANET), 170
Personal computer
Apple II, 166
business programs and calculations, 166–167
first PC models, 165–166
graphical user interface and Microsoft, 168
hardware and software, 166
IBM PC, 167–168
Macintosh, 167
microprocessor, 166
xerox set up, 166
Post-World War II bussiness
Cold War period, 90–91
double-digit inflation rate, 92
equity investors, 92
FASB, 90
financial accounting issues
Accounting Principles Board, 93
accounting research studies, 94
big frauds and little companies, 100–102
Committee on Accounting Procedure, 93
corporate mergers, 96–98
executive compensation, 102–104
FASAC and EITF, 95
FASB and GASB, 95–96
Financial Accounting Foundation, 94
Milken and Boesky conspiracy, 99–100
Wheat Committee, 94
Great Compression, 90
high-income taxpayers, 91
Martin’ statement, 91
political and economic power of labor, 91–92
Truman’s committee, 89–90
Wilson’s statement, 91
Private Securities Litigation Reform Act of 1995, 14
Public Company Accounting Oversight Board (PCAOB), 14–15
financial audit report, 20
internal control report, 21
Public policy and government accounting
budget cycle, 40
Chinese credit, political bureaucracy, 39–40
close-to-cash-base accounting standards, 41
comprehensive annual financial reports, 41
government and business, 56
nonprofit organizations
American Institute of Certified Public Accountants, 57
budgeting, 57
characteristics, 57
charity organizations, 57
FASB Statement, 57
future aspects, 177
Internal Revenue Service, 58
net assets, 57–58
non-governmental organizations, 58
technical problems, 58–59
Roman Empire, 40
rule of law and accountable government, 41–43
social contract theory, 40
U.S. government development
federal accounting, 47–49
federal government, 44–47
GASB board, 54–55
local government accounting, 52–54
Massachusetts Bay Company, 44
Plymouth Colony, 43–44
state and local government, 49–51
Virginia Company, 43
Public Utility Holding Company Act of 1935, 79
Qwest’s slamming, 139
Racketeer Influenced and Corrupt Practices Act (RICO), 100
Resolution Trust Corporation (RTC), 99
Revenue Act of 1913, 32
Sarbanes-Oxley Act of 2002 (SOX), 14–15
corporations and their auditors, 142
criticism, 142–143
executive compensation, 142
FASB, 142
provisions of, 141
rubber-stamping boards of directors, 142
Savings and loan associations (S&Ls), 99
Scandals, 83–87
Securities and Exchange Commission (SEC), 9, 78–79
Smuggling, 84
Social Security Act of 1935, 33
Statement of Basic Accounting Theory, 110
Statement on Auditing Standards (SAS), 17
Tax Reform Act of 1986, 35
Tax Relief Act of 2010, 35
Taxes and funding public policy
American taxes (see American taxes)
benefit principle, 26
Civil War fairness, 25
corporate income tax, 27
enforceability limits, 27
government structure, 27
horizontal equity, 26
in Britain, 24
institutional structure, 27
intergenerational equity, 25
Internal Revenue Service, 27
interperiod equity, 25
Jamestown tax on tobacco, 26–27
land owners and capitalists, 24
revenue breadth, 26
Smithian concept, 25
taxpayer Protection Pledge, 26
United States, 176
value added taxes, 37–38
Tech Bubble
Adelphia, 138–139
Aftermath
executive compensation, 144–145
Federal National Mortgage Association, 143–144
financial innovations, 145
HealthSouth, 143
oil limited partnerships, 145
tax scams, 145
transparency, 143
arrogance and incompetence, 120
deregulation, 119–120
Enron
acquisitions and fraud, 131
Anderson’s aggressive auditing, 134–135
derivative deals, 125–127
gas trading, 125
mark-to-market works, 127–128
political pressure, 131–132
quarterly earnings targets, 130–131
restatements and collapse, 133–134
SEC and restate earnings, 124
stock price, 123–124
stodgy transmission company, 124
structured financing and SPEs, 128–130
financial analysts, 122–123
Global Crossing, 137
high-tech industries, 121–122
manipulation and fraud, 139
MicroStrategy, 139
NASDAQ composite, 120
new accounting rules, 146–147
regulations, 120
Sarbanes-Oxley Act of 2002 (SOX)
corporations and their auditors, 142
criticism, 142–143
executive compensation, 142
FASB, 142
provisions of, 141
rubber-stamping boards of directors, 142
subprime meltdown
bank asset-liability management, 148
Black-Scholes model, 148
Case-Shiller Index, 150
collapse, 150–153
collateralized debt obligation market, 149
Community Reinvestment Act of 1977, 147
Dodd-Frank and regulations, 153–155
global actions, 155
mortgage companies, 149–150
mortgage-backed securities, 148
securitization, 149
trillion-dollar bailouts, 147
Wall Street investment banks, 148
tech stocks, 120–121
Tyco, 137–138
WorldCom, 136
Telegraph, 157
Telephone, 158
Temporary Liquidity Guarantee Program, 152
Term Asset-Backed Securities Loan Facility (TALF), 152
Trueblood Committee, 110
Tyco, 137–138
Universal Automatic Computer (UNIVAC), 161
Value added tax (VAT), 37–38
Works Program Administration (WPA), 76
WorldCom, 136
Zero-interest rate policy (ZIRP), 152