The Colonel Carter myth and the Securities Act: Using accounting history to establish institutional legitimacy

Abstract

This article examines the persistent myth that the testimony before Congress of the President of the New York State Society of CPAs, Colonel Arthur Carter, on 1 April 1933, prevented the creation of a government bureaucracy of auditors in the 1933 Securities Act, and instead persuaded Congress to leave the audit franchise in the hands of the accounting profession. The article uses archival evidence to argue that neither Carter nor anyone else in the accounting profession influenced the creation of the Securities Act’s audit provisions, and then describes how the audit requirement in the Securities Act was written and the impact the Colonel Carter myth has had on the regulation of the accounting profession.