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How the Ascent of the Rich Impacted on the Accounting Profession

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How the Ascent of the Rich Impacted on the Accounting Profession

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Justin Valsecchi 201306421
Accounting Studies Tut Group #3
Tutorial Assignment 2:
How people getting richer impacted the accounting proffession and accountants.

Over the last few hundred years the world saw the rise and evolution of the accounting profession, a profession that was greatly impacted by the increase in personal wealth of people, particularly during the industrial revolution. In the begining (i.e. the rennaissance era) merchants and explorers would have made use of a very basic book keeping system made up of log books of sorts, this system was brought about due to the rising importance of keeping track of ones wealth, something which through the ages has become a significant part of any economy. During the early 19th century the world saw the start of the first industrial revolution, which also sparked a rise in the capatalistic economy, which in turn gave rise to a significant increase in the wealth of people. With this new wealth many people could now expand their businesses and start new ventures, and so the application of accountiung had to evolve in order to accomadate these new ventures.Thus we saw the creation of manufacturing accounting principles and capital investment principles. Many people with large surplus capital started Banks which would allow for business owners to safely put their money away and earn interest on them, so at this point different forms of banks and banking policies were created in order to compete within the 'money market'. One such policy, was that of being able to take out a loan from the bank, which further expanded into businesses making use of a credit sales system. This was a very unsafe way of buying and selling goods particularly between international borders, and so international standards had to be created in order for fair reporting and trade to take place. Accountants took on this responsibility and made many new advancements in recording and presenting credit and debit accounts. After...