The first book on accounting was written by a Croatian merchant Benedetto Cotrugli, who is also known as Benedikt Kotruljevi?, from the city of Dubrovnik. During his life in Italy he met many merchants and decided to write Della Mercatura et
Painting of Luca Pacioli, attributed to Jacopo de" Barbari
For this reason, Luca Pacioli (1445 - 1517), also known as Friar Luca dal Borgo, is credited for the "birth" of accounting. His Summa de arithmetica, geometrica, proportioni et proportionalita (Summa on arithmetic, geometry, proportions and proportionality, Venice 1494), a synthesis of the mathematical knowledge of his time, includes the first published deion of the method of keeping accounts that Venetian merchants used at that time, known as the double-entry accounting system. Although Pacioli codified rather than invented this system, he is widely regarded as the "Father of Accounting". The system he published included most of the accounting cycle as we know it today. He described the use of journals and ledgers, and warned that a person should not go to sleep at night until the debits equaled the credits! His ledger had accounts for assets (including receivables and inventories), liabilities, capital, income, and expenses — the account categories that are reported on an organization"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.
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Latest News
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REZNICK GROUP TO HOST NATIONAL WEBCAST ON NEW AUDIT AND ACCOUNTING STANDARDS 01 October 2007 Reznick Group subject matter experts will host a national webcast on Wed., Oct. 3, 2007, from 2-4:30 pm ET to present a detailed outline of new audit standards and explain new accounting requirements for implementing and maintaining internal controls within an organization. Please click through for further details [AP]. |
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CENTER FOR AUDIT QUALITY ANNOUNCES APPOINTMENT OF PUBLIC BOARD MEMBERS 28 September 2007 The Center for Audit Quality (CAQ) has announced its first public board members: Harvey J. Goldschmid, former U.S. Securities and Exchanges Commission commissioner, Michele J. Hooper, co-founder of The Directors’ Council; and Lynn S. Paine, professor of business administration at the Harvard School of Business. These new members will bring an outside perspective to the CAQ board and its commitment to the concept that a robust public company auditing profession is fundamental to the public interest and the capital markets. Please click through for further comment [AP]. |
History of accounting
Early history
Accountancy"s infancy dates back to the earliest days of human agriculture and civilization (the Sumerians in Mesopotamia), when the need to maintain accurate records of the quantities and relative values of agricultural products first arose. Simple accounting is mentioned in the Christian Bible (New Testament) in the Book of Matthew, in the Parable of the Talents (Matt. 25:19). The Islamic Quran also mentions simple accounting for trade and credit arrangements (Quran 2: 282).
Twelfth-century CE Arab writer Ibn Taymiyyah mentioned in his book Hisba (literally, "verification" or "calculation") detailed accounting systems used by Muslims as early as in the mid-seventh century CE. These accounting practices were influenced by the Roman and the Persian civilizations that Muslims interacted with. The most detailed example Ibn Taymiyyah provides of a complex governmental accounting system is the Divan of Umar, the second Caliph of Islam, in which all revenues and disbursements were recorded. The Divan of Umar has been described in detail by various Islamic historians and was used by Muslim rulers in the Middle East with modifications and enhancements until the fall of the Ottoman Empire.
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Modern accounting/accountancy
Accounting is the process of identifying,measuring and communicating economic information to make informed judgements and decisions by the user of the information.
Accounting is the degree of measurement of financial transactions which are transfers of legal property rights made under contractual relationships. Non-financial transactions are specifically excluded due to conservatism and materiality principles.
At the heart of modern financial accounting is the double-entry bookkeeping system. This system involves making at least two entries for every transaction: a debit in one account, and a corresponding credit in another account. The sum of all debits should always equal the sum of all credits, providing a simple way to check for errors. This system was first used in medieval Europe, although claims have been made that the system dates back to Ancient Rome or Greece.
According to critics of standard accounting practices, it has changed little since. Accounting reform measures of some kind have been taken in each generation to attempt to keep bookkeeping relevant to capital assets or production capacity. However, these have not changed the basic principles, which are supposed to be independent of economics as such. In recent times, the divergence of accounting from economic principles has resulted in controversial reforms to make financial reports more indicative of economic reality.
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Significant Points |
Most jobs require at least a bachelor’s degree in accounting or a related field.
Overall job opportunities should be favorable; jobseekers who obtain professional recognition through certification or licensure, a master’s degree, proficiency in accounting and auditing computer software, or specialized expertise will have the best opportunities.
An increase in the number of businesses, changing financial laws and regulations, and greater scrutiny of company finances will drive faster-than-average growth of accountants and auditors.
