Transcript The history of accounting

The practice of
accounting has
been around for
many
thousands of
years and much
of what we
know of ancient
civilizations are
gleaned from
their
accounting
records.
• Most of the formal modern day accounting started at the
end of the Crusades. As trade dramatically increased
between Europe and Middle East, businesses grew to
beyond what a single owner could manage. This brought
about the need for written records so that business owners
could keep track of their transactions and ensure that
there agents performed profitably.
• Early history Accountancy's
infancy dates back to the
earliest days of human
agriculture and civilization
(the Sumerians in
Mesopotamia, and the
Egyptian Old Kingdom).
Ancient economic thought of
the Near East facilitated the
creation of accurate records
of the quantities and relative
values of agricultural
products, methods that were
formalized in trading and
monetary systems by 2000
BC.
• Simple accounting is mentioned in the
Christian Bible (New Testament) in the
Book of Matthew, in the Parable of the
Talents. The Islamic Quran also
mentions simple accounting for trade
and credit arrangements.
•Further development
accounting practices
were influenced by the
Roman and the Persian
civilizations that
Muslims interacted
• The most detailed example Ibn Taymiyyah provides of a
complex governmental accounting system in his book
Hisba for the Divan of Umar, the second Caliph of Islam, in
which all revenues and disbursements were recorded.
FROM HISTORY
Ibn Taymiyyah witnessed
conversions to Islam as a growing
trend among many Mongols.
• Ibn Taymiyyah was an Islamic
scholar (alim), theologian and logici
an born in Harran, located in what
is now Turkey, close to
the Syrian border. He lived during
the troubled times of the Mongo
invasions. He was a member of the
school founded by Ahmad ibn
Hanbal and sought the return
of Islam to what he viewed as
earlier interpretations of
the Qur'an and the Sunnah.
• The development of
mathematics and accounting
were intertwined during the
Renaissance. Mathematics was
in the midst of a period of
significant development in the
late 15th century. Hindu-Arabic
numerals and algebra were
introduced to Europe from Arab
mathematics at the end of the
10th century by the Benedictine
monk Gerbert of Aurillac, but it
was only after Leonardo Pisano
(also known as Fibonacci) put
commercial arithmetic, HinduArabic numerals, and the rules
of algebra together in his Liber
Abaci in 1202 that Hindu-Arabic
numerals became widely used in
Italy.
FROM HISTORY
19th century statue of
Fibonacci in Camposanto, Pisa.
• Leonardo Pisano Bigollo (c. 1170 – c.
1250) also known as Leonardo of Pisa,
Leonardo Pisano, Leonardo Bonacci,
Leonardo Fibonacci, or, most commonly,
simply Fibonacci, was an Italian
mathematician, considered by some "the
most talented western mathematician of
the Middle Ages.“
Fibonacci is best known to the modern
world for the spreading of the Hindu–
Arabic numeral system in Europe,
primarily through the publication in 1202
of his Liber Abaci (Book of Calculation),
and for a number sequence named the
Fibonacci numbers after him, which he
did not discover but used as an example
in the Liber Abaci.
• Never in history, has one
particular contribution served
to shape and mold business
in the way that accounting
has done. Since the
inception of trade and
business, civilization
understood the need for
accurate records. What we
were lacking was the means
for a standard of accurate
record keeping. Enter Luca
Pacioli. This Franciscan
monk was the father of
double entry accounting, and
set the business world on
fire.
FROM HISTORY
Portrait of Luca Pacioli, traditionally
attributed to Jacopo de' Barbari,
1495 (attribution controversial).
• Fra Luca Bartolomeo de
Pacioli (sometimes Paccioli or
Paciolo; 1445–1517) was an
Italian mathematician,
Franciscan friar, collaborator
with Leonardo da Vinci, and
seminal contributor to the
field now known as
accounting. He was also
called Luca di Borgo after his
birthplace, Borgo
Sansepolcro, Tuscany.
• It was such a perfect fit for a long unfulfilled
business need that it was like giving water to the
thirsty. Businesses and business merchants saw
at once the benefit of the double entry accounting
system in maintaining accurate and undisputable
records. This was the humble beginning of one of
the most important and most widely used
standards of business practice in the world today.