What did the AICPA establish in 1939 to address accounting issues?

The correct answer is the Committee on Accounting Procedure (CAP), which was established by the AICPA in 1939 specifically to address emerging accounting issues. The creation of CAP marked a significant step in the development of a structured approach to identifying and resolving accounting problems. By focusing on the need for authoritative guidance during a time of growing complexity in business transactions, CAP laid the groundwork for future standard-setting efforts, ultimately leading towards the establishment of more formal accounting standards.

While alternatives such as financial reporting councils and standards boards are associated with accounting principles and practices, they were created at different times and with different mandates. The Committee on Financial Reporting was not established by the AICPA, nor did it play the historical role that CAP did during its inception. The Accounting Standards Board, although important in the context of accounting standards, was formed later in 1959 and had a different focus than that of the CAP. Lastly, the Financial Reporting Council is a UK-based entity and not directly involved with the AICPA’s initiatives in the United States. Thus, understanding CAP's historical context showcases its pivotal role in shaping accounting procedures as we know them today.