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(Editor's note: December marks the 100th anniversary of the first CPA examination in the U.S. It was administered in New York following the earlier enactment in 1896 of the first CPA licensing law. This is the eighth article this year commemorating these important events 100 years ago.)

By George C. Romeo, PhD and Larissa Kyj, Rowan College

This December, we are celebrating the 100th anniversary of the first CPA exam. The question we hope to answer is, "Was the CPA exam the first test used in the U.S. as a criterion for admission into a society?"

To answer this question, we must first go back to the formation of the Institute of Accountants and Bookkeepers (later known as the Institute of Accounts) in New York during 1882--one of the earliest recorded efforts to establish accounting as a profession in the United States. It was a voluntary association of bookkeepers and accountants organized mainly for educational purposes. Right from the beginning, the organization stressed that admission should be zealously guarded and that only those possessing a high degree of ability as accountants would be accepted into the Institute. An applicant first had to possess practical experience as a bookkeeper and, second, had to pass an accounting (bookkeeping) examination. It would appear that this examination was established 14 years before the first CPA exam. However, in correspondence published in the BookKeeper on October 24, 1882, the president of the Institute inquired of the Examining Committee about its method of examining applicants.

The committee responded that the candidates should be of good moral character and understand the principles of double-entry bookkeeping, stressing that if the candidate met these conditions then "few questions and little time" would be necessary to prove competency. Paradoxically, the examination was deemed to be necessary to keep the standard of membership up; yet, few accounting questions and no written questions appear to have been asked.

In 1883, when the Institute of Accounts was considering going national, the Examining Committee was involved in more controversy when the question was raised whether a person living outside of New York City could pass a personal examination before the Examining Committee. The duty of the Examining Committee was to report to the Institute whether applicants were of good moral character and had the requisite experience and knowledge of accounts. To test their fitness, the Examining Committee called applicants before its members to question them on the subject of accounts. An editorial in the November, 1883 American Counting-Room mentioned the following concerns about the Examining Committee and its examination: 1) the title of the committee signified more responsibility than the committee was granted by the by-laws; 2) the examinations had never been more than "social chats"--professionals discussing the peculiarities and methods of their business; and 3) requiring an examination.

Wilkinson, who chronicled the CPA movement in the U.S. in The Certified Public Accountant in September 1928, implied a written exam was required by the Institute by stating "... the senior grade of membership known as fellows, was only granted to those who succeeded in passing a pretty stiff practical and technical examination." In 1887, the Institute had introduced three grades of membership: fellows of the Institute of Accounts, members, and associates. Yet, the qualifications for a fellow said nothing about a written exam.

In 1890, a change in the by-laws abolished the College of Fellows, making the fellowship a degree conferred by a vote of the Institute. Even with this change, the Institute may have confused the public by its advertisements in the journal Business during 1895. The description of a fellow read as follows:

Any member of good standing in the grade of Certified Accountants [not to be confused with Certified Public Accountants] for one year may be advanced to the class of fellow of the Institute upon passing such examination as shall be prescribed by an examining Board of Fellows. Fellows may use the initials F.I.A. after their names while members of the Institute.

Other historical accounts on whether the exam was oral or written were also unclear. As delineated above, the examination was more analogous to the requirements of a faculty member seeking promotion than to those of a person striving to become a CPA today. Professional experience, presentations, courses of study, and original work were all part of the examination, but no written test was required. Just as in the case of faculty promotion, hidden political concerns must also have played an important role in determining who became a fellow. Thus, the answer to our original question is no; the CPA exam was not the first test required for admission to an accounting organization. But was it the first written, formal test? The answer involves examining two other national societies extant late in the l9th century: the American Association of Public Accountants (1886) and the National Association of Accountants & Bookkeepers (1895). The American Association of Public Accountants, familiar to most accountants, is the predecessor of the AICPA. It was incorporated in 1887 as the first organization for public accountants in the U.S. The articles of the 1888 edition of the by-laws divided the membership into two classes--fellows and associates. One of the prerequisites for becoming an associate was passing the final examination provided for in the constitution. However, Webster (1954) indicates that, "Prior to 1897, and for some years thereafter, the association issued annual certificates which in one respect were receipts for dues." The only known instance where an applicant was required to show his qualifications by a written examination was the case of N.L. Mistri of Fort Bombay, India in 1897, and the questions used were those of the second New York CPA examination.

The National Association of Accountants & Bookkeepers (NAAB), was the other organization that might have required an examination. But the organization was declared "null and void" and disbanded the year after it was founded due to lack of interest. When it was reorganized three years later, the qualification for membership by examination was dropped. It seems probable that no one was ever tested by written examination.

In conclusion, as far as we can determine, the CPA exam was the first written test used consistently as a criterion for "joining the club." The first two societies requiring the CPA certificate were both established in 1897: the National Society of Certified Public Accountants and the New York State Society of Certified Public Accountants. *

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