A brief history of accounting through the ages

  • Staff Reporter | May 10, 2018
Accountants have helped run society for thousands of years

The need for accurate and timely record keeping isn’t a new concept.

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.

A brief history of accounting throught the ages

Ancient Mesopotamia

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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!

Roman Empire

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.

Medieval Europe

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.

Industrial Revolution

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).

Modern accounting

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.

Join 7,000 years of history

Get in on the ground floor of an ever-growing profession by studying accounting at one of Australia’s many Registered Training Organisations. Find out more!

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