Accounting is an almost ancient system of keeping and maintaining the financial records of a business, which is hard to believe when in today’s world we have facilities such as online accounting for small business. Many claim that this profession can trace its heritage all the way back to ancient Egypt and Mesopotamia through the discovery of ancient stone tablets recording tax and business transactions. The concept, however, has been around long before that, as since the prehistoric era we have had the need to account .Whetherit’s for food or clothing the concept is a necessity in any era of our history. In very basic terms accounting has always been a part of our history but it became more prominent when monetary systems were introduced to the world around 2000 B.C. in ancient Babylon.
Although we have indeed been using accounting since the Stone Age, the most significant development with regards to modern accounting occurred during the Renaissance period in Italy. In 1494 the accountancy world was revolutionised by an Italian friar by the name of Luca Pacioli and his book ‘Summa de Artihmetica, Geometria, Proportioni et Proportionalita’. Luca’s book described and explained many accounting practices that we still use today, including double entry book keeping, the use of journals and ledgers, inventories, liabilities and expense accounts. This forward thinker gained great respect in the field from his peers, and went on to teach mathematics to Leonardo Da Vinci and eventually became known as ‘The Father of Accounting’.
With the world advancing at such a fast pace it wasn’t long before industry had started to boom, particularlyduring the 17th century import and export was reaching its peak. This business evolved into such a large scale that it demanded investment. With the development of investment in stocks and shares of chartered companies the accounting profession had to evolve and adapt to maintain the movement of assets and profits within various industries.
As the various industries of the world have developed, so too have their accounting needs. This is most apparent during the industrial revolution. As production and manufacturing industries began to boom, businesses needed more effective ways of cost accounting and so accounting responded. On the 6th of July 1854 the first professional accounting institution was formed in Scotland, cementing it as an official profession.
Since the formulation of the ‘chartered account’ the profession has grown rapidly. Spreading to every corner of the globe, the need for an accountant is a must, especially within business. Accountants can help with many aspects of business whether it’s designing and setting up an accounting system or simply ensuring your tax payments are correct.
These events formed the basis for what we see as a modern day accountant. The profession has a rich heritage steeped in a cross cultural history, from humble beginnings in 15th century Italy to the forefront of the financial world. The profession has never been more popular, with so many industries expanding exponentially. Accounting itself has expanded into many new areas including online accounting for small business and even statutory accounting.