CPA Exam Review News Blog

The Founding Fathers - The First Auditors

Posted by Dr. Phil Yaeger on Jul 3, 2017 1:48:55 PM

Fourth of July week is here! There's plenty to do - beach parties to go to, watermelon to eat, and fireworks to see. This is the 241st commemoration of the Declaration of Independence of the United States of America. Historically young, the United States has experienced growth alongside the rest of the world in greater ways during this period than any other in history. We've created automobiles, travel through the air, have gone to space, most own or have access to a computer, and our phones fit in our pockets. One of the only consistent things during this time has been accounting.

 Accounting can be tracked back to the beginning of America.

One of the first stories comes from James Milligan, a merchant in Philidelphia who was appointed by the Continental Congress to sign Continental Currency. Milligan later became Commissioner of Accounts to the Continental Treasury in 1777, Auditor General in 1779, and Comptroller General of the United States Treasury in 1781. After scandals in trade companies funding, managing, and colonizing North America it became clear there needed to be order and transparency as the nation declared its independence. Accounting was taught at the first school in Massachusettes and Milligan was given full reign to audit at every level.


In fact, one of his most famous cases was the Wartime and Presidential Audits of George Washington, who was especially diligent about keeping track of his finances. At the end of the Revolutionary War, Washington used his expense reports to ask for $160,074 in reimbursement from the United States. In modern day, this was asking for $2.4 million back from the government. Milligan was charged with the task of auditing Washington. Astoundingly, he found Washington's numbers to be nearly exact, only off by 99 cents, or roughly $14.40 in today's currency. This obviously fed into the myth of Washington never telling a lie, but also laid the foundation of standards in auditing in the United States.


Now, times have obviously changed. We have computers and technology as tools to the accountant. There are certifications and schools and internships in accounting. Thousands of accountants have come and gone throughout the history of our nation and the world, but the foundation of accounting put in places by our founding fathers has passed the test of time. The next 241 years will prove new advancements in amazing ways, but if history shows anything from crossing oceans in boats to founding new countries and traveling to the moon, accounting is here to stay.

Tags: Accounting News