The development of accounting thought

Accounting has a long history. Some scholars claim that writing arose in order to record accounting information. Account records date back to the ancient civilizations of China, Babylonia, Greece, and Egypt. The rulers of these civilizations used accounting to keep track of the cost of labour and materials used in building structures like the great pyramids.

Accounting developed further as a result of the information needs of merchants in the city-states of Italy during the 1400s. Historians consider 14^th century Italian merchants to have developed the practice of double-entry book keeping, which is used by modern accounting. Although the earliest double-entry books appeared in 1340 in Genoa, the first published book on bookkeeping was written in 1494 by a Franciscan monk Luca Pciolo. This work summarized the main accounting principles that have remained unchanged up to date. Additional accounting works were published during the 16^th century in Italian, German, Dutch, French and English, these works including early formulations of the concepts of assets, liabilities and income.

In the mid-19^th century with the establishment of large public corporations owned by stockholders and administered by professional managers, the public demand for accurate financial reports and for government regulations greatly increased. The rise of the multinational corporations also resulted in increased accounting responsibilities, for it required to keep reports under different legal conditions, to make payments within various systems of taxes, tariffs and other government controls.

Since the mid—20^th century bookkeeping as an essential part of all accounting systems has been carried out by machines. The introduction of computers broadened the scope of bookkeeping and the term “data processing” now often associates with bookkeeping.