The United States has a longstanding tradition of accounting standards being set by the private sector (as opposed to the government). Although the federal government's Securities and Exchange Commission (SEC) has the legal authority to establish accounting standards for public companies, the SEC has historically looked to the private sector to set accounting standards.

The first two standard-setting organizations in the United States were the Committee on Accounting Procedure (CAP), which was established in 1938, and the Accounting Principles Board (APB), which replaced the CAP in 1959. Both organizations were committees of the American Institute of Certified Public Accountants (AICPA) and included approximately twenty representatives of the accounting profession who served on a part-time basis. Pronouncements issued by those two bodies are still considered to be generally accepted accounting principles (GAAP) today unless they have been specifically amended or replaced by a subsequent pronouncement...