Accounting in ancient times was very simplistic and was a basic way for one or an establishment to record ones assets and property. This form of accounting lasted thousands of years and did not change much until the industrial revolution in England. In the mid eighteenth century, England began the industrial revolution. Raw materials were turned into goods fro sale such as garments in textiles. The large abundance of money and goods flowing in and out of the country made keeping track of these transactions quite difficult. The form of accounting was called cost accounting. Until recently historian thought that this form of accounting was not created until the late nineteenth century. But in fact Britainand Spain had developed this type of accounting with the industrial revolution. The need for this type of accounting came from the great number of entrepreneurs that began to pop up in Britain in the mid 18th century. These businessmen were the ones who started the factories that fueled the industrial revolution. Business was competitive and each man wanted to strive to do the best. They needed a way to record their assets more accurately since there was a need to keep a tight profit margin and stay above the rest. From this cost accounting was born. This allowed business owners to more closely examine their margins and find ways to cut our non essential spending. Since there was little regulation on business during this time, sometimes drastic measures were taken to earn money and the workers suffered from this.
This type of accounting stayed around for centuries longer and is the base of our current accounting system. It has been used in the United States era of big business and proved successful for many years. This was until the crash of the stock market in the early twentiethcentury. Business’ were not closely monitored in what they did and put artificial worthinto their companies stocks. Companies also were involved in not so legal activities in recording their assets and companies worth. From this many citizens people across the world began dumping mass amounts of their assets into company stalks in the belief that their profit would grow with the success of the company. Since the true values of the companies were falsely represented it put the people who put their money into the stock market at great risk. This risk was shown when the stock market crashed and the great depression began. There then came an apparent need for big businesses to be regulated and their assets and transactions to be monitored. From this came the birth of the Certified Public Accountant or CPA. Their job was to process a business’ income from a year and find out if the information that was presented was in fact true. Practices such as audits which are a way for the government to see if the business or individual is being honest as to how much they made in a year and that it was in fact being recorded. This was put in place so that another market crash would not occur from a false representation of wealth in a company.
You be the judge. Is this happening again as we speak? The connections between the great depression and the recession we are in right now seem eerily similar. Do changes need to be made into the way our countries business’ are run?
The reason I had chosen to do my final project on the history of accounting is because my father practices as an accountant and I plan to pursue a career in accounting as well. Upon starting my research on the history of the accounting practice and techniques I assumed that it would have had a relatively short history, maybe somewhere in the 19th century. I was then asstonished when I found that accounting is one of the oldest forms of counting and was the start of the writing as a whole. This being said, the type of accounting that was done thousands of years ago was far from modern day accounting, but still has some key relationships. Accounting has been a way for people throught history to count and record property and anything in ones day to day life. Spread sheets were not used back then as they are today, but assets where still written down and put on record. Another assumption that i had made prior to doing the research project is that the process would be a bland and painful one. To my amazement it has in fact been a very enjoyable experience. Being able to trace accounting practices to old world times has fascinated me. I love to reseach history and I was thrilled that this project has turned into more of an exploration rather than into a detail oriented process. I can now switch the focus of my project to the impact of accounting throughout history rather than what the definition of accounting is and how it is practiced. At this point I am not quite half way into my investigation and I know with new information the basis of my argument and project will be subject to change. I cannot wait to find out more interesting facts and impacts of accounting through history!!
Spread sheets are used every day by accountants. They fuel the accounting practice and are one of the most helpful tools for ab accountant. They help to show a companies, assets, liabilities and gross profits. They are an easy way to tell how well a company is running in a few short seconds. Since I would some day like to become an accountant I should become very familiary with these kinds of spead sheets and learn to love them.
Accounting dates back over 5000 years ago ever since the first civilizations began. Most information about accounting was learned from the Renaissance period. Until recently little was known about accounting prior to the Renaissance. It was thought that this was the start of the accounting practice all together. Then after many archaeological digs, researchers and scientists discovered that accounting dated back much earlier than once perceived. Accountants helped to develop money and the banking system. They helped fuel the Renaissance with double entry book keeping and helped to save many citizens from going bankrupt during the time of the industrial revolution. Accountants were also the first to create writing. They were in fact the originators of the first written language over 5000 years ago. Accounting is all around us today and has been all through history. It is a huge part of our lives today and has helped to fuel civilizations for many thousands of years.
The history of accounting goes much deeper into history than one would think. The first accounting record made was in the year 7500 BC when coins were used to separate plots of land and livestock. This was when the concept of numbers for counting was developed. Then over the next 5000 years coins were continued to be the main source of recording accounting information that was until the year 3000 BC when papyrus was discovered in Egypt. Records began to be written from that point forward on papyrus. Then in 2200 BC one of the first laws was written to charge criminal for theft and other things and charged silver to make up for crime.
Welcome to blogs.oregonstate.edu. This is your first post. Edit or delete it, then start blogging!
