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Accounting is part of human nature. We have been keeping records of money and goods for as long as we’ve been writing, with the earliest records dating back over 7,000 years. So, whilst the way we conduct this process may have changed, the foundations of accounting belong to the ancient world.
The first records of accounting are accredited to the people of Mesopotamia. This region contained a group of ancient civilisations which, put simply, are the beginning of life as we know it. Spreading across an area which stretched from Turkey, through Syria, Iraq and Iran, and ended in Kuwait, Mesopotamia civilisations created many of the systems we use today. The birth of written literature, art and trade is owed to these groups of ancient people. Amongst their many triumphs is the introduction of accountancy.
Documents containing lists of recorded trades and expenditures began in this area over 7,000 years ago, and experts believe this may be attributed to trade deals and the taxation required to build and run temples. A record of such activities will have been taken to keep track of debts and basic financial planning. This eventually led to a monumental leap for mankind – the act of bookkeeping. This early form, which began between the 4th and 3rd millennium BC, involved the use of clay tokens and graphs on clay scripts. The notion to count out real-life situations with representational objects is the beginnings of the accounting we use today.
Whilst the civilisations of Ancient Egypt developed these concepts further (by establishing the need for an assigned accountant and recording written records, for example) it was Ancient Rome that took accounting to the next level. Their methods involved highly detailed financial information which was previously unheard of. The central Roman government listed and quantified for almost every expense of the Empire, such as the wide number of expenditures; grants of land, public distributions, war efforts, subsidies for the treasury and the building of temples etc. This greatly recorded accounting method suggests the idea of advanced financial planning and decision-making.
The methods for accounting stayed largely unchanged for centuries. That is until a major accountancy breakthrough began to crop up in the 13th century, spreading from the Middle East and up through Medieval Europe like a monetary wildfire – double-entry bookkeeping. The idea of this form of accounting relies on two equal sides, called debit and credit. These may seem like obvious financial measurements now, but back then, this was revolutionary. This system allowed for multiple transactions between several parties to be kept under record and also allowed for a person or companies to be more easily ascertained. The rules for this method (though already enacted) were first published by an Italian man called Luca Pacioli, in 1494. Pacioli, also referred to as “The Father of Accounting and Bookkeeping”, revolutionised accountancy not just for his home nation of Italy, but an entire continent. His publication allowed for any educated person to learn double-entry bookkeeping, which is considered the foundation on which all accountancy is built.
From the clay tokens used by the traders of Mesopotamia to the spoken financial reports of Ancient Egypt, from the detailed recording and planning of Ancient Rome to Pacioli’s publications on the double-entry system, we have been counting money for as long as we’ve had civilisations. Recording in any form is part of what makes us human. Inevitably, these origins have been greatly developed, and we now have systems in place which would be as mind-blowing as the discoveries were to ancient mathematicians at the time. However, without their early workings, it is unknown whether we would have modern accountancy at all.
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