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peared in England in 1553, one of these a mo-nopoly granted by Parliament for Russian trade. The joint stock concept arose about that time in France and Holland but was well devel-oped by then in both Germany and Italy. The English companies were resubscribed for each venture for many years until a more permanent financial-capital policy was adopted in the sev-enteenth century. English companies were also chartered for colonial development, such as the London Company and the Plymouth Company to develop the territory of Virginia in 1606. By the 1690s, there was active trading of stock in London. Soon after, the South Sea Bubble burst in England in 1720, shortly after the Mississippi Bubble of John Law burst in France. The use of corporations for business purposes was rare for the next 50 years in England. The Joint Stock Companies Act of 1844 required registration of all joint stock companies. In the United States, the most significant event was the 1875 "lib-eral" incorporation statute in New Jersey, which ultimately, in 1892, permitted corpora-tions to hold securities of other corporations, starting the first "trust movement."
Richard Vangermeersch
Bibliography
Abbott, C.C. The Rise of the Business Corpo-ration. Ann Arbor, MI: Edwards Broth-ers, 1936.
Davis, J.P. Corporations: A Study of the Ori-gin and Development of Great Business Combinations and of the Relation to the Authority of the State. New York: G. Putnam's Sons, 1905. Reprint. New York: Capricorn Books, 1961. Jenkins, A. The Stock Exchange Story. Lon-don: William Heinemann, 1973.
See also CAPITAL MAINTENANCE; CAPITAL STOCK; CASH BASIS ACCOUNTING; COMPA-NIES ACTS; COMPARABILITY; CONTINUITY; EXTERNAL AUDITING; GOODWILL; LIMITED LIABILITY; MERCANTILISM; PAR VALUE DOC-TRINE; PARTNERSHIP ACCOUNTING; PERIODIC-ITY; ROME (509 B.C.-A.D. 476); SEPARATE ENTITIES; SOUTH SEA BUBBLE
Cost Accounting Standards Board (1970-1980; 1988- )
One of the provisions of the Defense Production Act of 1950 (DPA) prohibited government con-tractors from discriminating against the govern-
ment by charging higher prices or imposing less favorable terms than those used in commercial business. When the DPA was undergoing its required biannual review by the Congress in 1968, Admiral Hyman G. Rickover, U.S. Navy, testified that this provision could not be en-forced. Long a critic of accounting practices used in defense contracting, Rickover stated that the methods used for charging overhead, the approaches to pricing component parts, and the treatment of intercompany profits were not standardized and were almost impossible to reconstruct.
He argued that the variety of acceptable accounting practices and the inconsistency with which they were applied made it impossible for a government contracting officer to determine what costs were and whether the government was paying excessive profits. Rickover esti-mated that uniform cost-accounting standards would save the government over $2 billion per year.
When the hearings were concluded, the DPA was extended and, based primarily on Admiral Rickover's testimony, the comptroller general of the United States was required to work with the secretary of defense and the di-rector of the Bureau of the Budget in conduct-ing a feasibility study of the application of uni-form cost-accounting standards to negotiated defense contracts of $100,000 or more.
Eighteen months later, January 19, 1970, the comptroller general issued the report on the feasibility study. The report concluded that it was feasible to establish and apply cost-ac-counting standards to provide a greater degree of uniformity and consistency in cost account-ing as a basis for negotiating and administering procurement contracts.
When debate on the extension of the DPA was renewed in 1970, the proposal to establish a Cost Accounting Standards Board, champi-oned by Admiral Rickover, also was supported by Senator William Proxmire of Wisconsin, the feasibility study, the Defense Department, the Bureau of the Budget, other government agen-cies, and the accounting profession.
Opposition came only from industry rep-resentatives who argued that imposition of cost-accounting standards could result in the with-drawal of some companies from government work. Additionally, they testified that uniform cost-accounting standards would not save the government the $2 billion per year that Rickover had estimated, that a single set of stan-
178 CORPORATIONS: EVOLUTION
Object Description
| Title |
History of accounting: An international Encyclopedia |
| Author |
Chatfield, Michael Vangermeersch, Richard |
| Subject |
Accounting -- History |
| Date-Issued | 1996 |
| Source | Originally published by Garland Publishing, Inc. |
| Rights | Copyright and permission to reprint held by: Academy of Accounting Hitorians |
| Type | Text |
| Format | PDF scanned at 400dpi with corrected OCR |
| Digital Publisher | University of Mississippi Libraries. Accounting Collection |
| Date-Digitally Created | 2011 |
| Language | eng |
| Identifier | vangermeersch |
