American and German accountancy took different paths in the early part of the twentieth century. In Germany, a persistent disconnect arose between relatively sophisticated managerial accounting practices for insiders and the methods used in public financial accounting. The “equity revolution” America experienced—an enormous shift in the number and expectations of shareholders—prompted new demands for financial statements designed to help evaluate the future earning power of companies. In contrast, the effects of World War I retarded equity–market development in Germany. Political frictions reinforced the Germans's; discomfort with equity markets and increased their resistance to revising accounting principles. Banks, tax law, courts, and lawyers, instead of professional accountants, became the primary source of accounting principles. Only in past decades, under pressure from the European Union and global capital markets, have the accounting systems begun to reconverge.