The history of accounting is a rich and storied one, filled with several surprises. Here are some of the key moments in the history of accounting which has brought us to the industry we know today.
76,000 or 7,000?
One of the biggest debates among historians interested in the development of accounting and business in general is just how far back into history the industry can be traced.
Some believe that a plaque found in Africa, dated at around 76,000 years old, shows evidence of the organization and arrangement of markings, and represents the first use of basic accounting techniques.
The earliest evidence that everyone agrees on is records from ancient Mesopotamia, which show how people 7,000 years ago used accounting to keep track of crop growth, as well as to measure whether they had hit their targets after harvesting.
It wouldn’t be until around 3,000 BC – a time when wealth started to grow and perhaps the birth of what we’d call capitalism – that accounting would develop further. Evidence again points to the Middle East and Iran in particular, where early rulers wanted to keep track of their wealth, as well as having an idea of what currency and assets their subjects owned.
This period appears to represent the first time people were employed as accountants, while well-organized tables populated with figures and calculations have been found dating back to this period.
The Roman Empire
Accounting was widely used throughout the Roman Empire. Emperor Augustus was the first to pioneer the use of accounting in Rome, using it to demonstrate the wealth of the city and indeed the whole Empire to the population, as well as to show where he had spent money in order to help them. Although we could cynically say this shows accounting was used as a means of keeping people in line, this transparency would help many rulers and countries around the world in future.
Roman armies also kept detailed accounts of their inventory, which helped them to plan the resources they needed to commit to particular battles.
Europe didn’t become a monetary economy in full until the 13th century, when detailed accounts would start to be kept. Naturally, demand for financial experts quickly rose, and double entry bookkeeping would be used for the first time. However, it wasn’t until 1494, when Luca Pacioli published his book, “Summa de Arithmetica, Geometria, Proportioni et Proportionalità,” that accounting would become widely understood and recognized as an essential need. The biggest feature of the book was a 27-page piece on bookkeeping, with many practices and ideas still being used today.
Today, accountants find themselves in demand all across the world, with individuals and businesses both seeking their services. As well as traditional accounting, transactions can now take place over the internet, and many client/accountant relationships exist without the two parties ever meeting.