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History of Accounting and Its Importance

Accounting is as old as civilization and one of the most important professions in the field of business and economics. Accountants are known to have been involved in developing cities and trade in the process of building wealth. They created the concept of numbers and wealth besides pioneering the advancement of money, finance and banking. The Italian Renaissance was fueled by the double entry bookkeeping that was invented by accountants. They salvaged many investors and entrepreneurs in the Industrial revolution from bankruptcy. The Information Revolution that is accelerating the global economic trends has been made possible through great contributions by the accounting profession. Western capitalism was as a result of confidence imparted in the capital markets by accountants.

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The first royal charters were given to the Accountants society in Edinburgh, and after the emergence of formal accounting profession, the title of chartered accountant was used by practitioners in the field of accounting. There were 38, 690 incorporated and chartered accountants in 1957 and the number has since then increased dramatically. By 2002, the chartered Institute of Accountants in England and Wales alone had a worldwide membership of over 120, 000. Currently there are numerous allied institutes across the world dominated by well established, giant accounting firms. While some argue that accounting was simply a way to handle the needs of the changes in society and environment, others are of the opinion that application of precise accounting methods is what has enabled modern commerce and businesses to grow tremendously. In particular, governments had a strong need to keep careful records of their expenditure and property. In Mesopotamia, the scribe (accountant) had the duties of writing up transactions and ensuring their compliance with commercial transaction requirements. Scribes were employed in various places including temples and firms. Pre-Christian China employed the use of accounting to evaluate the effectiveness of government programs. Coined money was introduced around 600 B.C. by Greeks and made an important contribution to accountancy. The annual budget is thought to have been invented in the Roman Empire where it was used to control and coordinate the financial enterprises of the empire (Alexander 1-10).

The modern accounting profession was born in Scotland where the oldest societies of accounting exist in addition to being the origin of the Chartered Accountant. This designation was later adopted by the English Institute in 1880 and soon became a recognized term in the English language. One of the early Scottish accountants; George Waston (1645-1723) trained in Holland and passed on the material. In the mid of 19th century, England was in a prosperous financial time. This brought in the need for accountants and led to the establishment for the profession in the country. Afterwards, large amounts of British capital started getting into the United States where industries were rapidly growing. As a result, British and Scottish professions traveled to the United States to inspect or audit the investments and this marked the beginning of the profession in America (Brown’s 1905).

In conclusion, from these historical developments the accounting practice has spread rapidly across the globe to quickly develop into the respectable profession that it is today. The transition has seen the profession refine its operating standards to match the ever changing and challenging business environment. Today, accounting is necessary in controlling the efficient running of business operations.

Works Cited

Alexander, R. History of Accounting. New York: Association of Chartered Accountants in The United States, 2002.

Brown, R. A History of Accounting and Accountants. Edinburgh: Jack, 1905.

Tamu (2009).Why Study Accounting History? Web.

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StudyCorgi. (2022, February 13). History of Accounting and Its Importance. Retrieved from https://studycorgi.com/history-of-accounting-and-its-importance/

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