Accountancy, Past and Present

Accountancy dates back to the earliest days of human civilisation (the Egyptian Old Kingdom and the Sumerians in Mesopotamia). Simple accounting is mentioned in the New Testament, in the Parable of the Talents, and the Quran also mentions simple accounting for trade and credit arrangements.

In the 12th-century AD, the Arab writer, Ibn Taymiyyah, mentioned in his book Hisba (literally, "calculation", or "verification") detailed accounting systems used by Muslims as early as in the mid-7th century AD. These accounting practices were influenced by the Persian and the Roman civilisations that Muslims interacted with.

However, Luca Pacioli (1445-1517), n Italian mathematician and Franciscan friar, is widely regarded as the "Father of Accounting". His Summa de arithmetica, geometrica, proportioni et proportionalita (Summa on arithmetic, geometry, proportions and proportionality, Venice 1494), was a compendium of the mathematical knowledge of his time, and includes the first printed description of the method of keeping accounts that Venetian merchants used at that time, known as the double-entry accounting system. He described the use of journals and ledgers, and warned that a person should not go to sleep at night until the debits equalled the credits.

Pacioli's ledger had accounts for assets (including inventories and receivables), liabilities, income, capital, and expenses - these are the account categories that are reported on an organisation's balance sheet and income statement, respectively. He demonstrated year-end closing entries and proposed that a trial balance be used to prove a balanced ledger. His treatise also touches on a wide range of related topics from accounting ethics to cost accounting.

The first known book on accounting in the English language was published in 1543in London, England by John Gouge (or Gough). It is described as A Profitable Treatyce called the Instrument or Boke to learn to know the good order of the kepyng of the famous reconynge, called in Latin, Dare and Habere, and, in English, debtor and Creditor.

A book described as The Merchants Mirrour, or directions for the perfect ordering and keeping of his accounts formed by way of Debitor and Creditor, after the (so termed) Italian manner, by Richard Dafforne, accountant, published in 1635, contains many references to early books on the science of accountancy. The book is a very complete treatise on scientific accountancy, beautifully prepared and containing elaborate explanations. There were several editions of Richard Dafforne's book - the second edition in 1636, the third in 1656, and another in 1684. The numerous editions tend to prove that the science was highly appreciated in the 17th century. From this time on, there has been a continuous supply of literature on the subject.

In the present day, accountancy includes the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and other decision makers make resource allocation decisions. Although accountants originally worked only in public practice, selling advice and services to individuals and businesses, many today work within private corporations, the financial industry and various government bodies.