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American Institute of Accountants Deloitte Collection

11-2-1951

Letter from John L. Carey, Executive Director, American Institute

of Accountants, to Firms and Individual Practitioners Represented
in the AIA Re: request that compensation of CPAs...be exempted
from control.
John L. Carey

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Part of the Accounting Commons

 American Institute ofAccountants
JOHN L. CAREY INCORPORATED UNDER THE LAWS OF THE DISTRICT OF COLUMBIA

EXECUTIVE DIRECTOR
THE NATIONAL ORGANIZATION OF CERTIFIED PUBLIC ACCOUNTANTS
H. T. WINTON
ADMINISTRATIVE SECRETARY

270 MADISON AVENUE, NEW YORK 16, N. Y.

November 2, 1951

To the Firms and Individual Practitioners

Represented in the American Institute of Accountants

Gentlemen:

Last August, by direction of the Executive Committee, the Institute filed

a brief with the Salary Stabilization Board requesting that compensation of
certified public accountants in the employ of public accounting firms be exempted
from control. The brief offered three principal arguments:

(1) that the work-load and responsibilities of many staff men in public
accounting firms have been substantially increased as a result of new
taxes and the Defense Program, and it is only fair that their compensation
should be increased accordingly, particularly since fees for professional
services are exempt from price control;

(2) that normal business patterns of promotions and pay increases are not
satisfactorily applicable to compensation for professional services; and

(3) that the position of certified public accountants in the employ of public
accounting firms is strictly comparable to that of lawyers employed by
law firms and physicians employed by hospitals who were exempted from
control by amendment of the Defense Production Act.

The exemption for lawyers and physicians was written into the Defense
Production Act by a conference committee, without prior notice, as a substitute
for a provision in the House version of the bill which would have exempted all
professional salaries from control. We were advised by members of Congress that
there was no possibility of obtaining enactment of a further amendment to exempt
other professional salaries before the end of the session which recently adjourned.
 The Salary Stabilization Board has now taken the position that it will not
grant any blanket exemption by occupation, and consequently the American
Institute’s request for exemption from salary control of CPAs employed by pub­
lic accounting firms has been turned down. The text of the letter from the
executive director of the Board is as follows:

“The Salary Stabilization Board took up at its meeting on Friday,

October 12 the request of the American Institute of Accountants for
exemption of certain certified public accountants. The Board considered
this matter carefully and concluded that the petition could not be granted.
The basic reason for the Board’s determination was that the Board feels
that any exemptions of any public groups from the regulations which
pertain to all segments of the economy should be made by the Congress
rather than by the Board.”

At its next meeting the Institute’s Executive Committee will consider

possibilities of further action. In the meantime, the Institute’s counsel has pre­
pared the enclosed memorandum, which outlines what is permissible under the
existing law and regulations.

Yours sincerely,

Executive Director
JLC/ar
Enclosure