History of Accounting

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Date Submitted: 12/14/2010 07:42 PM

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Accounting has always been one of the most vital professions in various communities. The field of accountancy can be considered as the “oldest profession.” It is essential to many aspects of our society and is considered as “the language of business.” Its importance can never be diminished as long as businesses are functioning, financial information is needed by the general public, and the tax regulations exist. Taking such a major role in the modern business world, it must also have a critical position in history. It is important for people in the filed of accountancy to fully understand the development of accounting dating back to its earliest appearance, the importance of accounting throughout the development of the global economy, and one must also be able to interpret the near future of accounting in order to be a well-informed participant in the field of accountancy.

The earliest appearance of accountancy dates back to 4500 B.C. in the Babylonian Empire and accounting records were also discovered in the ancient pharaoh’s Egypt. It is evident that the habit of accounting for food, clothing and other life necessities was held by families in the prehistoric times to maintain a livelihood. The concept of value and the monetary system were developed into more complexity and depth as men began to trade with each other. Although accounting was an essential element in the ancient society, formal accounting theory and concept were not brought to the world until Luca Pacioli, a famous mathematician who originated from the business cradle of Europe during that time period – Venice – wrote his first “Summa” in 1494 explaining the concept of record keeping. The most useful and famous accounting concept described in Pacioli’s accounting text book was “the double-entry accounting,” which continues to be the fundamental structure for contemporary accounting systems in all types of units. Marion, Allison M. (2001). Accounting. In Encyclopedia of Business and Finance...