FABM Notes

HISTORY OF ACCOUNTANCY

The cradle of civilization (3600 B.C.)
Accounting's history can be traced back thousands of years to the cradle of civilisation in Mesopotamia. It is said to have developed alongside writing, counting and money. A clay tablet, which has more or less flat surface made of clay, is the tool where transactions were recorded. This tablet contains all the business transactions like accounts receivable and accounts payable.

Double-Entry bookkeeping (14th Century)
Luca Pacioli, whom was the friend and contemporary of Leonardo da Vinci, was well known in Italy as the “father of accounting”. He wrote the SUMMA DE ARITHMETICA, which was the first book published that contained a detailed chapter of double-entry bookkeeping. This time was generally considered as the dissemination of double-entry bookkeeping by Luca Pacioli.

French Revolution (1700)
This occured in the 1700‘s wherein the Italians of 14th and 16th centuries were considered as the “father of modern accounting”. In this period, the development of accounting has begun which was influenced by social upheavals. These upheavals affected the government, finances, laws as well as the customs and other businesses.

Industrial Revolution (1760-1830)
With the growth of the limited liability company and large scale manufacturing and logistics, demand surged for more technically proficient accountants capable of handling the growingly complex world of global transactions. Mass production and the great importance of fixed assets were given attention during this time. This growing importance of accountants helped in transforming accounting into a profession.

The Beginnings of Modern Accounting in Europe and America (19th Century)
The Modern, formal accounting profession emerged in Scotland in 1854 when Queen Victoria granted a Royal Charter to the Institute of Accountants in Glasgow. Chartered Accountants from Scotland and Britain came to the U.S. to audit British investments. In this period, rapid changes in accounting practice and reports were made.

The Present (20th Century)
As economies worldwide continued to globalize, accounting regulatory bodies required accounting practitioners to observe International Accounting Standards. Accounting has taken off with big firms and advanced accounting software, as accountants no longer need to go at a double entry bookkeeping by hand. Machines and computers were added over the course of the past 150 years has changed the very nature and efficiency of an accountant‘s daily tasks. This will continue to be a necessary institution at companies large and small, with new technology in the coming years only set to improve the efficiency and quality of accounting work produced.