It started in the Fertile Crescent

The discipline was firstly recognized in the fertile land of Mesopotamia in 8,500 BC. People traded clay objects for commodities like wool, spices, clothing and other goods. Archaeologists discovered clay tablets in which symbols and other characters were engraved. They believed that such symbols were used to keep records of goods sold, goods acquired and other transactions during those times.

Accounting was also seen in the ancient Babylon, Egypt and Greece. People used clay tablets to keep their records. In later years, the ancient Egypt switched to using papyrus, a water plant, in recording their transactions. Egyptians’ records contain payments, wages of their laborers, cost of labor, and purchase requisitions.

These just proved that accounting already existed during biblical times!

Major developments of the profession were seen during the Renaissance period in Italy. Men during this time recorded their transactions in single amount with a little bit explanation beside. This is the so-called single entry system which most non-accounting majors use in keeping track of their money.

The Italian Monk

The golden year of accounting was when an Italian math-lover published a book called Summa de Arithmetica, Geometrica, Proportioni et Proportionalita which literally means Everything About Arithmetic, Geometry, Proportions and Proportionality. This Italian monk is Friar Luca Pacioli.

His thirty-six chapter book thoroughly tackled the double-entry system (debit and credit) and other commerce-related concepts.

The book has impacted the subsequent development and standardization of the accounting profession that is why he is considered to be the father of the double-entry system. or simply the father of accounting.

Assigning of Cost

The Industrial Revolution changed the way goods are produced from the craftsman and/or artisan method to the assembly-line method. Cost accounting, which focuses with the assigning of costs to products, also took the center stage during the mid-18th to the mid-19th centuries.

The Continuous Development

These developments never stop and as a matter of fact, accounting continues to grow to achieve unity in response to nations’ differing traditions, capital markets, business practices and legal systems. Today, the International Accounting Standards Board (former International Accounting Standards Council) regularly issues and releases standards and other major modifications in pursuit to international comparability of financial statements.

You probably have heard that in the Philippines, all CPAs are required to complete 100+ Continuous Professional Development (CPD) units as a requirement in renewing license to ensure that one is still competent of the profession despite the numerous changes in accounting standards.

Keywords:
What is accounting
What is the history of accounting
Who is Luca Paccioli?