The American Institute of Accountants and the professionalization of auditing: The campaign to end temporary audit staff and promote the natural business year, 1923–1960

Abstract

This article examines the efforts of the American Institute of Accountants (AIA) to end audit firms’ reliance on temporary workers through promotion of the Natural Business Year (NBY). It is argued that the NBY campaign demonstrated leadership by the AIA to improve audit practice, in contrast to much of the profession’s history and to much accounting historical research. The article also adds to research on how firms choose a fiscal year-end. Consistent with prior studies, it is found that larger firms are more likely to use a December 31st year-end, and that the reluctance to switch to the NBY has always been based more on habit than empirical evidence.