Accounting has been around since the beginning of civilization. Accountants participated
in the development of cities, trade, and the concepts of wealth and numbers. (Giroux) The
importance of accounting cannot be overemphasized. Equally important are the standards
used to guild the application of accounting practice. Without principles and standards,
financial reporting would not fairly present the financial position of a company.
Accounting has changed and evolved vastly over time and continues to change. I will
discuss the evolution and history of accounting, the Conceptual frame work of accounting,
and the governing bodies which shape the standards and principles of accounting practice.
The beginning of civilization occurred during the transition from hunter-gatherer to farmer.
Farming led to crop surplus and therefore the need to trade and barter. Jericho, the oldest
city known to historians was the first known trading center for surplus goods. Personal
wealth created the need to keep track of inventories. Ancient bookkeepers used small clay
balls called tokens to count and keep track of existing wealth. These tokens were used as
evidence of transactions. Over time, the tokens were used to make impressions in clay
along with pictures which represented the first attempts at accounting. These events took
place around 5000 B.C. (Giroux)
Evidence suggests that double entry bookkeeping developed in Italy around 1200 B.C. The
first book written on double entry bookkeeping was written by Luca Pacioli in 1494.
(Smith) Pacioli was referred to as the father of accounting, but he did not actually invent
the system he described. He simply wrote about the business practices used by merchants
in Venice at the time. Many of his writings were used for several centuries. With the
development of technology, wealth, and trade came the need to adequately account for the
complexity involved. Scribes became accountants and in the process invented numbers and
writing. Accounting played a central role in the development of civilizations. Accountants
invented writing, participated in the development of money and banking, invented double
entry bookkeeping, and helped develop the confidence in capital markets.
The industrial revolution started around 1750. As industry, mass transportation and capital
markets were established, the role of accountants expanded. By the mid to late 19th
century there was a strong need for professional accountants. The earliest of the big four
accounting firms was started by William Deloitte in 1845. Today the firm still bears his
name, Deloitte and Touche. Samuel Price and Edwin Waterhouse formed their partnership
