Foreign Languages Department № 2
«The History of Accounting»
Done: Izhevsky V.
Checked: Gamper E.E.
-- 1. What Is Accounting
-- 2. History
--- 2.1. Ancient Accounting
--- 2.2. Accounting In Mesopotamia
--- 2.3. Accounting In Ancient Egypt, China, Greece and Rome --- 2.4. Medieval Accounting
--- 2.5. Italian Renaissance: Birth of Double Entry Bookkeeping ---- 2.5.1. Luca Pacioli Biography
---- 2.5.2. Significance of the Summa
--- 2.6. Professional Accountancy Travels Across the Globe
--- 2.7. The Twentieth Century
-- 3. How Technology has Impacted Accounting
- Reference List
The history of accounting is as old as civilization, key to important phases of history, among the most important professions in economics and business, and fascinating. Accountants participated in the development of cities, trade, and the concepts of wealth and numbers. Accountants invented writing, participated in the development of money and banking, invented double entry bookkeeping that fueled the Italian Renaissance, saved many Industrial Revolution inventors and entrepreneurs from bankruptcy, helped develop the confidence in capital markets necessary for western capitalism, and are central to the information revolution that is transforming the global economy. There are no household names among the accounting innovators; in fact, virtually no names survive before the Italian Renaissance. It took archaeologists to dig up the early history and scholars from many fields to demonstrate the importance of accounting to so many aspects of economics and culture. The role of accountants in the ancient world is coming into clearer focus with new archaeological discoveries and innovative interpretations of the artifacts. It is now evident that writing developed over 5,000 years--by accountants. It is difficult to overestimate the importance of double entry bookkeeping. It was central to the success of Italian merchants, necessary to the birth of the Renaissance. Industrial Revolution firms required accountants to provide the information necessary to avoid bankruptcy and their role developed into a profession. Big business required capital markets that depended on accurate and useful information. This was supplied by what became an accounting profession. Today, a global real-time integrated information system is a reality, suggesting new accounting paradigms. Understanding history is needed to develop the linkages to predict this future.
1. What is accounting
Accountancy is the process of communicating financial information about a business entity to users such as shareholders and managers. The communication is generally in the form of financial statements that show in money terms the economic resources under the control of management; the art lies in selecting the information that is relevant to the user and is reliable. The principles of accountancy are applied to business entities in three divisions of practical art, named accounting, bookkeeping, and auditing. Accountancy is defined by the Oxford English Dictionary (OED) as "the profession or duties of an accountant". Accounting is defined by the American Institute of Certified Public Accountants (AICPA) as "the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof." Accounting is thousands of years old; the earliest accounting records, which date back more than 7,000 years, were found in Mesopotamia (Assyrians). The people of that time relied on primitive accounting methods to record the growth of crops and herds. Accounting evolved, improving over the years and advancing as business advanced. Early accounts served mainly to assist the memory of the businessperson and the audience for the account was the...