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Accounting Police: Do 
They Exist?
by: John Day 
Who created accounting principles? Who sets and revises accounting 
standards? What if you don’t follow all the rules, do you go to jail? Is 
there an accounting police force that investigates and arrests violators? 
It would seem that there must be some regulatory force to make sure that 
providers of financial statements conform to the rules. There is, up to a 
point, and here is how it works: 
Mainly, it’s all voluntary and it works pretty well. First, 
double-entry accounting originated in Italy in the 1400’s, so its been 
around awhile. Accounting principles have evolved over the years just as 
have accounting standards. The reason why the system works is that the 
business community could not function if there was not commonality and 
consistency in financial statement reporting. It would be chaos, much like 
if there were no driving rules of the road. 
Therefore, in the United States, a body of experts known as the 
Financial Accounting Standards Board (FASB pronounced Fasbee) was 
established in 1973, which superseded another board called the Accounting 
Principles Board (APB). The FASB members go through a lengthy process of 
analyzing and reviewing problems in the accounting field that are brought