International Accounting Day: A Look Back At The Important Events That Shaped Our Profession Today
A trusted accounting professional is vital to the success of a company. Remember that most businesses won’t survive without accountants, so for today, give yourselves a pat on the back for a job well done.
But how well do you know this profession we all love?
Earliest records of accountancy
Did you know that accounting can be traced as far back as ancient Mesopotamia? It’s believed that the earliest records of accounting were unearthed 7,000 years ago among the ruins of ancient Mesopotamia. These artifacts showed that people during those days used accounting to record crops and herd to determine if there was a shortage or surplus during harvest time. The techniques ancient people used back in the days are still being utilised by accountants today.
Biblical roots of accountancy
You’d be surprised to know that accounting has Biblical roots. This centuries-old profession has been alluded to several times in the Holy Word. Many trace this profession back to Luca Pacioli (considered the father of accounting) in the 15th century but accountants have been around during the Old Testament.
Events that transpired between 1800 B.C. and 95 A.D. mentioned financial accounting in various manners. Some examples are:
- 2 Kings 22:7 “No accounts were kept with the men to whom the money was paid over to be spent on workmen since they were honest in their dealings.”
- Luke 16:2 “So he called him in and asked him, “What is this I hear about you? Give an account of your management, because you cannot be manager any longer.”
- Luke 14:28 “For which one of you, when he wants to build a tower, does not first sit down and calculate the cost to see if he has enough to complete it?”
Rise of accountancy during the Roman Empire
Accounting evolved during the time of the Roman Empire. Emperor Augustus’ financial records showed that records of money used in the military and gladiator events, religious offerings and building of temples were used to make financial decisions. The ancient Romans also recorded taxes, public revenue, and even slaves.
Romans were known to be obsessed with accounting. They computed their revenue every day and rigorously kept records of cash and transactions.
Meet the Father of Accounting
We have Pacioli to thank for the concept of bookkeeping. In 1494, the Italian mathematician penned a twenty-seven page treatise on bookkeeping titled Particularis de Computis et Scripturis (Details of Calculation and Recording) which discussed record keeping and double entry accounting,which was to become the reference text on accounting and bookkeeping centuries after its creation.
Among the learnings of Pacioli’s texts were:
- Use of journals and ledgers
- Accounting for assets, receivables, inventories, liabilities, capital, income and expenses
- Maintaining balance sheets and income statements
First accountant company
It is believed that the first accountant company was established during the 17th century, a time when numerous publications on accounting were published. In 1683, Robert Colinson wrote “Idea Rationaria,” a highly notable book during the period many referred to as the “Scottish Enlightenment.”
Thomas Stevens, an accountant general of the East India Trading Company was considered the first shares-based, limited liability company.
First cost accountant
The first cost accountant was Josiah Wedgwood. In 1772, during a slump in his business, he devised a method of identifying the profit or loss each time one item is sold from his store. He took into consideration not just the cost of materials but other factors like transport and storage. Interestingly, this led to the discovery that his head clerk was stealing money from him.
Recognition for accountants
Accountants were first publicly recognised in 1831 when the Bankruptcy Act was passed. This put accountants in the same league as bankers and merchants when it comes to performing audits. This was also the era when the first of the Big Four firms was founded. In 1845, William Welch Deloitte (aged 25) founded Deloitte.
In 2001, in a move to further improve the quality of accounting services, the International Accounting Standards Board (IASB) was formed.
Some additional fun facts:
- In ancient times, before a numbering system was invented, accountants use clay tokens to keep tracks of grains and animals.
- Bubble gum was invented by an accountant named Walter Diemer. He was worked for a company called Fleer Corporation during the 1920s and worked on creating bubble gum during his spare time.
- Accountants, bookkeeper and tax collectors have a patron saint and he is St. Matthew of Apostle. He was initially a tax collector in Capernaum.
- There are more than 1,000 accountants who work as FBI special agents.
- A team of certified public accountants spends an estimated 1,700 hours counting the ballots of the Academy Awards by hand.
One of the ways we celebrate and enrich this profession is by continually striving to enhance our accountants’ skills through training courses. If you’re looking for a firm to help you succeed in your career, get in touch with us and check out available positions here.