The Accounting Historians Journal Vol. 10, No. 2 Fall 1983
Barry C. Broden UNIVERSITY OF HARTFORD and
Stephen E. Loeb
UNIVERSITY OF MARYLAND
PROFESSIONAL ETHICS OF CPAS IN TAX PRACTICE: AN HISTORICAL PERSPECTIVE
Abstract: The paper traces the development of the accounting profession's own standards relating to tax practice. When appropriate, the nature and effect of government regulation on the profession's own standards are noted. It was determined that the accounting profession has been slow in developing standards for self-regulation in the area of tax practice. This may be related to two factors: (1) the existence of strong government regulation of tax practice, and (2) the diverse nature of the occupational groups engaged in tax practice.
Certified Public Accountants (CPAs) have been involved in tax practice since the passage of the corporate excise tax law in 1909. Over the years CPAs have been subject to various rules and stan-dards prescribed by the profession. The purpose of this paper is to trace the development of the accounting profession's own standards relating to tax practice.
CPAs as professionals regulate themselves. However, in tax practice CPAs are also subject to government regulations. These regulations affect the accounting profession's own rules. The paper, however, is limited to the development of the rules and standards of the American Institute of Certified Public Accountants (AICPA) and its predecessors. When appropriate, the nature and effect of government regulation on the profession's own standards are noted. Generally, state societies and state boards follow the AlCPA's lead in matters relating to ethics.
Ethics of Tax Practice—The Early Years (1900-1950)
In the years immediately after the adoption of the Federal In-come Tax, both the AICPA which was then called the American Institute of Accountants (AIA) and the Federal Government were concerned with the professional behavior of CPAs engaged in tax practice. The code of ethics of the AIA was still in its formative