By Larissa S. Kyj, PhD, and George C. Romeo, PhD, Rowan College of New Jersey

[Editor's Note: 1997 marks the 100th anniversary of the incorporation and founding of the New York State Society of CPAs, the first state society of CPAs. The following provides additional background into the formation of that society and the profession as it is known in the United States today.]

There were many accounting and bookkeeping organizations in the United States during the 1890s; most of these organizations were little more than trade guilds or benevolent organizations. Shortly after the passage of the first CPA law in 1896, a need developed for an organization comprised solely of CPAs; thus, the first organization in the U.S. to require a CPA for joining the club was established in January 1897--the NYSSCPA. The Institute of Accounts appears to have been instrumental in the formation of the society: Four of the five original incorporators (Henry Harney, F.J. MacRae, S.E. Sargent, John Hourigan) as well as the first president (Charles Haskins) and vice-president (John Hourigan) were key members of the institute. For the first few years, many of the important players remained active in both societies. In addition, two of the first three members of the New York State Regents Board of Examiners (Charles E. Sprague and Charles W. Haskins) were members of both organizations. All three examiners from July 1899 to June 1900 were members of the NYSSCPA and the institute (Haskins, Loomis, Kittredge). The two organizations worked in harmony, and the society was strongly supported in Accountics, the official journal of the institute.

The Institute of Accounts

The organization, "The Institute of Accountants and Bookkeepers of the City of New York," whose name was officially changed in 1886 to "Institute of Accounts," should not be confused with the American Institute of Accountants which was the predecessor of the AICPA. The formation of the Institute of Accounts, established 15 years before the organization of the NYSSCPA, was one of the earliest recorded efforts to establish the accounting profession in the U.S.

The establishment of the Institute had been advocated and promoted by editorials in The Book-Keeper, the oldest accounting journal in the U.S., first published in 1880. The constant letters and editorial calls in The Book-Keeper were an indication of the need for an organization of accountants and bookkeepers in the country's largest city, New York, during the latter part of the 19th century.

The first meeting with the goal of forming an organization of accountants and bookkeepers in New York was held April 11, 1882, at the Astor House. A complete report on the meeting was printed in The Book-Keeper on May 9, 1882. A committee consisting of Thomas B. Conant, Edward T. Cockey, and Selden R. Hopkins was appointed and charged with setting forth the prospectus and objectives of the association. The committee presented six objectives for such an association including elevating the moral and intellectual status of each and every member of the profession, advocating the proficiency of its members, and serving as a mutual organization providing death and sickness benefits to its members.

With these objectives, the committee as reported in the same issue of The Book-Keeper, believed that the institute's name would become "synonymous with professional skill and practical proficiency." The institute considered itself an educational and professional organization guided by the motto, knowledge, experience, and integrity. The institute was officially incorporated on July 28, 1882, and Selden R. Hopkins, the editor of The Book-Keeper, who had so zealously pursued its formation in his journal, was credited for it.

To become a member, an applicant needed practical experience as a bookkeeper or an understanding of accounting, and had to pass an examination before a committee appointed by the institute not only as to his knowledge of accounts, but also as to his moral standing and integrity in the community. This examination as a prerequisite to membership was established 14 years before the first CPA exam. As the institute found itself with requests for membership from men outside the vicinity of New York City, the oral examination became a concern that appeared to be hindering its growth. As a result it was later changed, with the exam being a requirement only at the upper grades of membership.

The organizers intended to make the institute an educational vehicle to promulgate the "science of accounts." In 1880, Charles Sprague published his paper on "accountics," the mathematical science of values, which included the first accounting equation in print in the U.S., in The Book-Keeper, and the institute became the main forum for the development and instruction in the science of accounts.

Each meeting usually involved a lecture/reading by one of the members or a prominent businessman on the science of accounts, bookkeeping, or various other business topics. About every third or fourth meeting, there was a general discussion on a topic of interest dealing with accounting.

The institute was the first organization to set a standard for professionalism in the U.S. During the late 1880s, the most prestigious accountants were Chartered Accountants from Great Britain who used the initials F.C.A. The institute raised the prestige of the U.S. accountants by emphasizing the various stages of competencies required by the profession. Membership was segmented into three classes: associates, certified accountants, and fellows. The requirement to become a fellow or certified accountant involved passing a comprehensive examination. With this segmentation, the entry examination was eliminated and examinations for higher classes were instituted. Each class or grade was eligible to receive a separate certificate. The certified accountants (not to be confused with certified public accountants) were entitled to use the initials C.A. after their names. The highest grade, fellows, were allowed to use the initials F.I.A. after their names.

By way of fellowship among accountants, auxiliary meetings called Hoot Nights provided entertainment for members and their families. During these special meetings, the rooms were decorated to coincide with the theme for the evening, poems were recited, trivia games of knowledge were played, music was provided, and even women were invited. (Let us remember that no women were allowed in the accounting organizations until the early 20th century.)

When Charles W. Haskins, as president of the NYSSCPA, founded the School of Commerce, Accounts, and Finance at New York University, several of the professors whom he engaged were his long-time acquaintances from the institute.

Among the more famous members of both the institute and New York State Society of CPAs were such prominent accountants and businessmen as Charles Sprague, member of the Accounting Hall of Fame, author of the New York Accountant's Law, and member of the first New York Board of CPA Examiners; Joseph Hardcastle, a prolific writer and contributor to the accounting and business journals during that period, and professor at the New York University School of Commerce, Accounts, and Finance; Anson O. Kittredge, editor of The Office, Business, and Accountics and a professor at the New York University School of Commerce, Accounts, and Finance; and Charles W. Haskins, future dean of the New York University School of Commerce, Accounts, and Finance, first president of the New York State Society of CPAs, first president of the Federation of the Society of Public Accountants, and a partner of Haskins & Sells. When Haskins became the first president of the society, Sprague was the president of the National Institute of Accounts, a short-lived attempt to organize a national organization. At the same time, Kittredge was the editor of the Institute's official journal Accountics. *