The History and Development of Accounting and Disclosure of Charitable Organizations in the United States

• In Event: Accounting History

Abstract

The history and development of the tax-exempt sector in the United States is linked to the political, economic, and social environment throughout the years; consequently the accounting for such entities are also linked to the same factors. Previts and Merino (1998) in The History of Accountancy in the United States communicate that accounting is a social construct. The development of accounting and disclosure within the tax-exempt sector is consistent with this view. The purpose of this this paper is to review the development of accounting and disclosure for charitable organizations and illustrate how their evolution links to the political, economic and social characteristics through time. This paper reviews the history of the nonprofit sector in the United States specifically related to charitable organizations, the development of accounting and auditing standards for nonprofits, the development of tax-exempt legislation, and the evolution of Form 990 as a disclosure tool. There is reference to the political, economic and social characteristics influencing charitable organizations and their related development as well as accounting and disclosure practices throughout the paper.

Author

• Mary Sasmaz, Case Western Reserve University