20,000 BCE to NowAs part of “The Accounting Journal” by Ben ScottSee appendix for further reading

ACCOUNTING THROUGH HISTORY

A baboon bone engraved with 3 rows of markings and with a sharp quartz fragment on one end. It’s considered to be an early example of a tally stick, most probably used to keep count of a resource or perhaps of a trade.

Some believe it could also represent a table of prime numbers, or even a primitive lunar calendar as it is similar to the calendar sticks used by Namibian Bushmen today.

Tally sticks predate written alphabets by tens of thousands of years, and may have initially been developed to record gambling results…

References in appendix

ISHANGO BONE20,000 BCE

Ancient Mesopotamia, Babylon, Assyria and Sumeria all left evidence of early accounting and bookkeeping records on clay tablets.

The need for accounting may even have driven the invention of maths and money. Early accountants tracked the growth of crops, livestock herds, goods traded and expenditures by the temple bureaucracy. “Early statistics were collected in the name of the needs of ‘statesmen’ to know the facts of their population and territory […] growth of the population was seen as constitutive of the nation’s wealth” (Robson, 1992)

References in appendix

TEMPLE RECORDS5,000 BCE

Image credit: Marie-Lan Nguyen

The cylinder seal was invented by multiple civilisations in the Near East around the same time. Seals were used as administrative tools, much like signatures. They were usually about 1 inch long, inscribed with figures and cuneiform writing, and used to roll impressions into soft materials like damp clay.  This sample is from Godin Tepe, an ancient Persian site in the central Zagros mountains, excavated by Canadian scientists in 1965. They discovered early examples of cylinder seals used for certifying accounting documents, and also the first confirmed evidence of people brewing beer from barley! (Coincidence? You be the judge...)

References in appendix

CYLINDER TOKENS3,500 BCE

An ancient Babylonian clay tablet, a little wider and thicker than an iPhone.

Archaeologists still debate which of several mathematical interpretations to apply to the figures, but it’s commonly thought to be an example of a teacher’s guide or lesson plan for training scribes to record numbers using cuneiform script.

References in appendix

PLIMPTON 3221,800 BCE

The Roman emperor Augustus (adopted son of Julius) is buried with a funerary inscription which describes his life and accomplishments. It’s noteworthy because of a section which details the costs of various public works, events, and donations of land and resources to citizens and soldiers of Rome. This data was drawn from his rationarium (Latin for “account”) which was a published record of expenditures - cash and commodity transactions - of all sorts covering over 40 years. This demonstrates that meticulous financial records were kept by the government and the military on a large and systematic scale, and it may also constitute the first “public relations move”.

References in appendix

RES GESTAE DIVI AUGUSTI14 CE

Luca Pacioli is often called the father of modern accounting, thanks mostly to his book published in 1494, which includes a large section that lays out the principles of double-entry bookkeeping (which had first been devised nearly 200 years previously in Italy). His book was one of the first to be published on the Gutenberg printing press, and is considered to be the first accounting text.

Luca’s interests ranged beyond maths to include books on magic and juggling, and he was known to have tutored Leonardo da Vinci!

References in appendix

SUMMA DE ARITHMETICA1494

As international trade became a major influence on the economy, especially in western Europe, accounting gained significance throughout society. It took on both moral and social relevance as a metaphor for important civic ideals, and this was reflected in their artwork – particularly of the Dutch and English. “Accounting paintings were a significant genre in Dutch art. For 200 years, the Dutch not only dominated world trade and portrayed themselves that way, but in hundreds of paintings, they also made sure to include the account books. This was not simply a wealthy nation crowing about its financial success. The Dutch were the leading merchants of their time, and they saw good accounting as the key to both their wealth and the moral health of their society. To the audience of the time, the paintings carried a clear message: Mastering finance was an achievement requiring both skill and humility.” – Jacob Soll, Boston Globe, 2014 In 1602 the Dutch created both the first publicly traded company, and the Amsterdam stock exchange. Over time, as the system we now call capitalism took shape, the notion of nobles and administrators submitting to public audits began to take hold – though not without a fight… but everyone realised that if a society is to grow and prosper, the handling of money has to be taken seriously and done right!

References ICAEW,

RENAISSANCE16TH-18TH CENTURIES

Accounting becomes a specialty, and no longer part of everyday life for the majority of the middle class. Investors, nobles and entrepreneurs must rely on experts to manage their financial affairs, and the work of accountants mingled more frequently with that of lawyers and solicitors. The Bankruptcy Court (England) Act 1831 established accountants alongside bankers as suitable to conduct audits – this is considered the first legal recognition of the accountancy trade. The Joint Stock Companies Act of 1844 and the Limited Liability Act of 1855 added to the growing complexity of commerce as London became the financial capital of the western world (not to mention Australia – still very much a colonial possession in those days!) By 1853, Institutes of Accountants were formed in both Edinburgh and Glasgow. The first royal charter was granted and the term “chartered accountant” was coined in 1854. Professional standards bodies establishing strict rules and regulations for members to follow proliferated in the succeeding years around the industrialised world. (Continued)

INDUSTRIAL REVOLUTION19TH CENTURY

• The Institute of Chartered Accountants of Scotland is founded in 1854

• The Institute of Chartered Accountants in England and Wales granted royal charter in 1880

• The American Institute of Certified Public Accountants is established in 1887

• New Zealand’s Institute of Accountants is formed in 1894, followed by the New Zealand Accountants’ and Auditors’ Association in 1898, all later brought under the New Zealand Society of Accountant’s Act of 1908 – today, Chartered Accountants Australia and New Zealand

• Chartered Accountants Ireland formed in 1888• Also in 1888 – the Financial Times begins publication• The Canadian Institute of Chartered Accountants is incorporated in 1902

• Corporation of Accountants of Australia granted official coat of arms in 1905

• The Institute of Chartered Accountants in Australia granted royal charter by King George the Fifth in 1928

• Institute of Chartered Accountants of India established in 1949

References 1, 2, 3, 4

INDUSTRIAL REVOLUTION19TH CENTURY

Commerce gets more complex – accounting keeps pace: • The Companies Act 1900 is passed, which

among other things requires limited companies to produce annual audited balance sheets

• Management Accounting evolves during World War I to improve munition production cost-efficiency. Accounting is recognised as a profession of national importance with regards to wartime conscription.

• Passage of the UK Sex Disqualification (Removal) Act in 1919 leads to Mary Harris Smith becoming the first female chartered accountant in the world.

• International convergence movement begins in the 1950s

• Joint Committee on Constitutional Review, Parliament of Australia (1959) recommends the Uniform Companies Act to supercede acts based on the English Companies act of 1929

• Computerised accounting began in 1955 (link back to part 3?)

• Decimalisation came to Australia in 1966• Australian government introduces a GST in

2000

MODERNISATION20TH CENTURY

Appendix:Slide 2: Ishango Bone Wolfram.com, WikipediaSlide 3: Temple Records CAEW, ScienceDirectSlide 4: Cylinder Tokens WikipediaSlide 5: Plimpton 322 Cambridge UniversitySlide 6: Res Gestae divi augusti WikipediaSlide 7: Summa de Arithmetica Xavier University, LeonardoChess

From myob.com.au/blog/60-years-of-accounting-software-introduction/

ACCOUNTING THROUGH HISTORY