History of Accounting
Accounting is one of the oldest professions. The history of accounting dates back to the earliest days of civilization driven by the trade system of crops and products necessary for survival. As the barter system expanded to include monetary exchange, methods were formalized by 2000 BC. To include the creation of accurate records of the quantities and relative values.
Influence of Earliest Accountants
Through archaeological discoveries of artifacts, researchers are learning more about the true influence the earliest accountants had on civilization. Through their discoveries, archeologists have discovered accountants participated in the development of:
· trade – expand market for and access to goods and services
· cities – as trade grew, so did the marketplace
· concepts of wealth and numbers – personal and governmental planning
· writing – understandable system of accurate recordkeeping
· double entry bookkeeping – associated with birth of Italian Renaissance
· money and banking – helped businesses avoid bankruptcy in Industrial Revolution
Father of Accounting
The history of accounting is not complete without Luca Pacioli (1445 – 1517), also known as Friar Luca dal Borgo and the “Father of Accounting”. Pacioli is credited for the “birth” of accounting. In 1494, he wrote a textbook that was a compilation of the mathematical and accounting knowledge of his time. His textbook provided the first printed description of the double-entry accounting system used by Venetian merchants in the late 15th century including a similar accounting cycle as we know it today. The system described journals and ledgers with sections for assets, liabilities, capital, income, and expenses found on the modern accounting balance sheet.
As civilization evolved, businesses grew and so did capital markets and with that…accountability. Successes depended more and more on accurate and dependable financial documents. Through time, the role of the accountant has become an integral part of almost every aspect of day-to-day business and governmental regulation. The history of accounting has led modern accounting to become a global, real-time integrated information system driving the direction of accounting expertise and emphasis on the importance of the accounting profession.