“Free, fair and full reports of industrial organizations,” the January 12, 1901, issue of Commerce, Accounts & Finance said, “ should be founded upon thorough, independent audits of accounts by disinterested certified public accountants, whose signed certificates, to be published with the report, are a more nearly perfect guarantee of reliability than any other yet to be discovered.”
The article, believed to have been written by Charles Haskins, was one of many calls for independent auditing in the early decades of the century. But these calls were largely ignored by Washington and Wall Street regulators. The stock market crash of 1929 and the ensuing Depression brought the issue into the public spotlight, especially when it became obvious that proper accounting practices might have prevented some bankruptcies and consequent unemployment.
On April 1, 1933, Colonel Arthur Carter, President of the New York State Society of CPAs, testified before the U.S. Senate Committee on Banking and Currency. As the only accountant to testify, Carter helped convince Congress that independent audits should be mandatory for public corporations. The 1933 Securities Act subsequently required public corporations to file independently certified registration statements and periodic reports. A year later, the Securities and Exchange Commission was created to administer the new legislation.
The regulating bodies immediately needed accountants. Women accountants, who (except for the remarkable Jennie Palen) had been unable to make headway at the leading firms, suddenly found themselves in demand.