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History of Accounting

Prof. Anjana S

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Accounting is aptly called as the LANGUAGEOF BUSINESS.

The basic function of any language is to serveas a means of communication.

In this context, the purpose of accounting isto communicate or report the results ofbusiness operations and its various aspects.

HISTRORICAL TRACE OF ACCOUNTING

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EVOLUTION OF ACCOUNTING

Accounting is as old as money itself.

Accounting & Civilization.

Arthshasthra -- KautilyaVishnugupta Chanakya Kautilya, a 4th century B.C economist

(under the King Chandragupta Maurya). Kautilya wrote The

Arthashastra, the science of wealth and welfare .

The Arthashastra contains 150 chapters, which are classified by

topic in 15 books.

It consists of three reasonably well developed parts: (i) national

security issues including a foreign policy, (ii) administration ofjustice including crime and punishment issues, and (iii) policies

related to economic development, taxation, labor management and

financial management.

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Bollae and tokens circa 3300 BC

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Picture in the Tomb of Chnemhotep, pharaoh ofEgypt circa 1950 BC. The ancient Egyptianscribe (seated on the left) prepared his

accounts on papyrus with a calamus

Papyrus is a thick paper-likematerial produced from the pith of

the papyrus plant that was onceabundant in the Nile Delta of Egypt.

Papyrus PlantWriting on Papyrus with a Calamus

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Part of Confucius jobresponsibilities as agovernment employee wasaccounting.(500 BC).

A Chinese thinker and social philosopher, whose teachings andphilosophy have deeply influenced Chinese, Korean, Japanese,

Taiwanese and Vietnamese thought and life. His philosophyemphasized personal and governmental morality, correctness ofsocial relationships, justice and sincerity.

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Marble-tablet:Account of Disbursements of theAthenian State

c. 418-415 BC

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Father of Modern Accounting Fratter Luca Bartolomes Pacioli was

born during 1445 in Sansepolcro,

Tuscany, Italy.

Da Vinci

(Close Friend of Pacioli)

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EVOLUTION OF ACCOUNTING

Fra Luca Pacioli was an Italian Mathematician, Scholar and

Philosopher.

He published (1494) his most important work, Summa De

Arithemitica, Geometrica, Proportioni et Proportionalita,

(Review of Arithmetic, Geometry, Ratio and Proportion) which contained,

two chapters, a detailed description of accounting as practiced

in that age.

Pope X appointed Pacioli as a Professor of Mathematics in

1514 in Rome.

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Other Contributors -- Prof. Simon Stevin and Prof.Arthur Cayley.

Arthur Cayley was a Professor of Mathematics at Cambridge

University in England and wrote The principles of double

entry system.First professional organization of accountants was founded

in Venice in 1581.

Profit and Loss Account -- Balancing at the end of every

year . Balance Sheet -- drawn up at regular intervals.

Industrial Revolution & Accountant

EVOLUTION OF ACCOUNTING

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HISTORY OF ACCOUNTING8000 BC Jerry of Jericho First used "tokens" to accurately count the

temple's wealth

3100 BC Marion the Sumerian Invented Cuneiform writing to determine the king's

wealth & tribute payments0 Jerome of Rome Rich Romans kept financial records in memo form and

on ledgers. Scribes kept detailed financial records ofthe Empire

1299 AD Amatino Manucci Florentine merchant, developed the first knownfinancial records that included all major components

of double entry bookkeeping1494 Luca Pacioli Publication of Summa, which included the first full

description of the Italian method of double entrybookkeeping

1772 Josiah Wedgwood Industrial Revolution entrepreneur that developedinnovative cost accounting records following a severe

recession1854 William Cooper Early founder of a Big Six firm, important to the

development of the British accounting profession

1920 Donaldson Brown GM CFO developed the "modern" cost accountingsystem used by industrial giants to control vast

operations

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Marion the Sumerian Amatino Manucci Arthur Cayley Simon Stevin

Josiah Wedgwood William Cooper Donaldson Brown

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