As long as there have been people making money, there’s been someone keeping track – whether that’s with an abacus or a supercomputer.
From ancient Mesopotamia to today, as business, economies and empires get more complex and far-reaching, so too does the sophistication of accounting practices.
We call ourselves 'partner' because we’re as focused on our clients' financial success as they are. Strengthening the financial performance of Australian small business is our passion…
The development of early accounting can be traced back to ancient Mesopotamia where temples needed a way to track their taxation and trading. Other early accounting records have also been found in the ruins of ancient Babylon, Assyria and Sumeria.
Ancient accounting records of expenditures and goods received from over 7,000 years ago have been found on clay and stone tablets in the region – really makes you thankful for MYOB!
The role of the accountant was becoming fully realised in the Roman Empire, with evidence showing the government had access to extensive financial information on the movements of funds and resources throughout the empire. Records of cash, commodities, and transactions were meticulously kept by accountants in the Roman army.
A major breakthrough, that we’re still using today, was made in the 13th century. Double-entry bookkeeping revolutionised accounting, with Luca Pacioli (often recognized as the father of modern accounting and bookkeeping) introducing the field in Italy. By the end of the 15th century, bankers and merchants in Florence, Genoa, Venice and Lübeck used the system widely.
With the manufacturing boom of the industrial revolution, more robust methods of accounting were needed in order to keep track of external finance (like shareholders) as well as accurately predict profits and costs based on existing financial data.
The rise of external finance through shareholders also increased demand for trustworthy financial statements. Accountants weren’t just reporting to internal management any more but were also responsible for creating external financial reports. This caused the split between financial accounting (for external stakeholders) and management accounting (for internal stakeholders).
In 1854, Queen Victoria granted a Royal Charter to the Institute of Public Accountants in Glasgow, which created the profession of chartered accountants. Up until this point, accountants were generally part of the same professional body as solicitors, and there was often overlap in the functions surrounding forensic accounting.
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