History of Accounting

Accounting has been around far predating modern times and has drastically evolved into what it is today.

Image Description: A hand over old writings

Historical Accounting & Its Beginnings

Accounting records have been traced back over 7000 years - with the oldest records we have found in Mesopotamia showing lists of expenses and goods that have been traded back and forth. These records were very simple, nothing like you would see noted today, but these are just the beginning steps of getting everyone into accounting. In 23 BC, “The Roman historians Suetonius and Cassius Dio record that Augustus prepared a rationarium (account) which listed public revenues, and the amounts of cash in the aerarium (treasury), in the provincial fisci (tax officials), and in the hands of the publicani (public contractors); and that it included the names of the freedmen and slaves from whom a detailed account could be obtained,” and so by AD 14, the roman empire had their own accounting records for just about everything.

In 1494, Luca Pacioli, an Italian mathematician, published a book outlining double-entry bookkeeping - thus having one of the biggest impacts on modern accounting. Pacioli wasn’t the first to create this method of accounting, but rather the first to detail it out and publish it. Since his work became so widespread, many refer to him as the Father of Accounting.

Modern Accounting

With the rise of the industrial revolution (1760-1840), there became a bigger demand for accounting and in 1854, Scotland was the first to recognize accounting as a profession by their creation of two organizations - the Edinburgh Society of Accountants and the Institute of Accountants and Actuaries in Glasgow. America followed in 1887 with AAPA. (The American Association of Public Accountants.) In 1896, CPAs (certified public accountant) were designated by taking a standardized test and later, in 1957, the AICPA (American Institute of Certified Public Accountants) became the group that gives the CPA title

Following the 1929 crash of the stock market, GAAP (generally accepted accounting principles) was just starting to form in America. Then in 1973, the International Accounting Standards Committee (IASC) was created with 10 different countries representing it. Eventually, IASC was replaced with the International Accounting Standards Board (IASB) in 2001; which aimed to have global accounting standards. Through this, the IFRS (International Financial Reporting Standards) was born and in 2002, the EU (European Union) decided that IFRS would apply to their companies, introducing IFRS to many large companies. Today, America still follows GAAP and over 150 jurisdictions across the world follow the IFRS. So by the 19th & 20th century, accounting had become a professional role requiring standards and certifications.

All Caught Up!

Accounting has always had a vital role in society and runs deep with its past!