We explain the history of accounting, its relationship with mathematics and politics. Also, modern accounting.
What is the history of accounting?
Accounting is a discipline responsible for measuring and analyzing the financial and asset situation of a specific individual, nation or organization, whether in the public or private sphere, in order to provide relevant information for management and decision-making tasks.
It is a technical discipline, to which accountants or accounting professionals are currently dedicated, professions that have only existed since the 19th century to the present day, despite the fact that accounting has a thousand-year history. This is because the need to account for assets, that is, to keep records of them for better economic organization, It is as old as humanity.
In fact, it is thought that It was one of the reasons for the invention of writing which precisely took its first steps in Mesopotamia, Egypt and other geographies as a method of representing goods, livestock or people, through signs or drawings of them. Lists of expenses, goods received and sold, and other similar documents dating back to around 7,000 years are still preserved.
Besides, The rise of the great ancient empires meant an accumulation of economic information productive, tax and commercial that undoubtedly represented a challenge for administrators, given their volume of transactions. That's why demanded the work of accountants of some kind, that would keep records of what there is, what is owed, what is negotiated, what is conquered, what is collected in taxes, etc.
The Roman Empire, for example, was famous for its handling of financial information, but it was far from the first to do so. The ancient Persians, Phoenicians, Assyrians and Sumerians already had a relative practice of accounting.
On the other hand, The first texts on the art of accounting emerged in the cultures in which mathematics was invented. During the Mauryan Empire (320 to 185 BC) of India, for example, the Brahmin and writer Chanakya (c. 350-283 BC) wrote his work Arthashasthrain which he explains in detail how to keep the accounting books of a sovereign State.
Something similar was developed in the time of the Roman emperor Augustus (63 BC-AD 14), who listed and quantified the public spending of the empire, as evidenced in the Res Gestae Divi Augusti (“The exploits of the divine Augustus”). There, records were kept of subsidies, costs to war veterans, offerings, temple constructions, etc. That is just one example of the numerous accounting documents that survive from Ancient Rome.
Accounting later gained importance in medieval Europe when In the 13th century a monetary economy began. In fact, at that time the double entry method was introduced, which records a debit entry for each transaction (from the Latin I will debit“debt”) and another in credit (from the Latin believe“believe” or “trust”).
The pioneers in the use of this methodology were the Jewish bankers of the Middle East, although it soon moved to Renaissance Italy, seat of the commercial bourgeoisie, and the first book that includes this accounting method is Farolfi's Ledger (1299-1300). ), from Giovanno Farolfy & Company, a Florentine company based in Nimes, France.
Two other books of importance for the standardization of accounting at that time were:
- The treaty Della mercatura e del mercante perfetto (“On the Merchandise and the Perfect Merchant”) by Benedetto Cotrugli (1416-1469), Italian merchant and economist, published in 1573 for the first time in Venice.
- Summa de Arithmetica, Geometria, Proportioni et Proportionalità (“Review of Arithmetic, Geometry, Proportions and Proportionality”) by Franciscan friar Luca Pacioli (c. 1445-1517), which appeared in 1494 and soon became a reference book for merchants of the time.
The arrival of modernity and capitalist thinking meant an even greater need for professional accounting. For example, Starting in 1600, the rise of joint stock companies required new accounting information systems which led to their division into two aspects: accounting for internal purposes (for administration), and accounting for external purposes (for financial purposes).
But modern accounting, as it is understood today, is a product of professionalization of the trade in the 19th century, especially in Scotland where he managed to separate himself from the legal profession. Thus, in 1854, the Glasgow Institute of Accountants petitioned Queen Victoria for a Royal Charter, requesting the formalization of the accounting profession as one of tradition and respect, whose professionals became considered “chartered accountants.”
Shortly after, the first colleges of public accountants emerged in Wales and England, at the end of the 19th century. With London being the financial center of the world during the Industrial Revolution, British considerations on accounting soon became an international norm and were echoed in other nations. In the United States, for example, the first American Institute of Public Accountants was established in 1887.
Continue with: Financial accounting
References
- “Accounting” on Wikipedia.
- “History of accounting” on Wikipedia.
- “Animated history of accounting” (video) in Sage Spain.
- “Historical evolution of accounting and its relationship with accounting research and regulation in the United States, southern Europe and Argentina” by Mileti, Mabel and others, at the National University of Rosario (Argentina).
