Read complete books and articles on: History of Accounting

Accounting - classification, analysis, and interpretation of the financial, or bookkeeping, records of an enterprise. The professional who supplies such services is known as an accountant. Auditing is an important branch of accounting.

The Role of the Accountant

The accountant evaluates records drawn up by the bookkeeper and shows the results of this investigation as losses and gains, leakages

The Role of the Accountant

The accountant evaluates records drawn up by the bookkeeper and shows the results of this investigation as losses and gains, leakages, economies, or changes in value, so as to reveal the progress or failures of the business and also its future limitations and possibilities. Accountants must also be able to draw up a set of financial records and prescribe the system of accounts that will most easily give the desired information; they must be capable of arriving at a comprehensive view of the economic and the legal aspects of a business, envisaging the effect of every sort of transaction on the profit-and-loss statement; and they must recognize and classify all other factors that enter into the determination of the true condition of the business (e.g., statistics or memoranda relating to production; properties and financial records representing investments, expenditures, receipts, fiscal changes, and present standing). Cost accounting shows the actual cost, over a certain period of time, of particular services rendered or of articles produced; by this system unprofitable ventures, services, departments, and methods may be discovered.

Development of Modern Accounting

Although there were stewards, auditors, and bookkeepers in ancient times, the professional accountant is a 19th-century development. Unlike those precursors, modern accountants usually do not service a single client or employer; instead they offer their expertise, for a fee, to several individuals and businesses. The profession was first recognized in Great Britain in 1854, when the Society of Accountants in Edinburgh was given a royal charter. Similar societies were later established in Glasgow, Aberdeen, and London. In the United States the first such professional society was the American Association of Public Accountants, chartered by the state of New York in 1887.

All the states and Puerto Rico and the District of Columbia now have laws under which an accountant who fulfills certain educational and experience requirements and passes an examination may be granted the title Certified Public Accountant (CPA). CPAs have organized into state and national societies. The bodies representing the accounting profession in the United States are the American Institute of Certified Public Accountants, which is the contemporary successor organization of the American Association of Public Accountants, and the American Accounting Association, organized in 1916. In the United States, the Financial Accounting Standards Board, an independent nongovernmental organizaiton sponsored by financial-reporting industry groups, is the main institution responsible for establishing accounting standards and rules. The International Accounting Standards Board develops standards and rules that are accepted by many nations.

With the growth of corporate activity in the 20th cent., the field of accounting has increased greatly in importance and has seen many improvements in theory and techniques. The chief causes of changes in accounting methods have been more complex tax laws and regulations and the need to keep uniform accounts for possible governmental or public scrutiny. Contemporary accounting firms also have taken on managerial functions and are no longer concerned simply with ascertaining and reporting financial condition but also with advising a client how to act on this information; they also consult on information-technology systems and other services. This has greatly increased the potential for conflicts of interest, because the services provided to clients by accounting firms must be evaluated in their audits and because the fees paid by a client for such services may be more important to the accounting firm than that paid for an audit, potentially undermining the independence of the audit. As a result, in 2000 the Securities and Exchange Commission specified the types of services accounting firms could provide without compromising their independence as auditors.

A series of revelations concerning accounting firms' failure to detect or publicly challenge irregularities or fraud when auditing the finances of a number of corporations led Congress to establish (2002) the Public Company Accounting Oversight Board. The board is appointed by the Securities and Exchange Commission and has the power to register and regulate accountants and firms that act as auditors. It sets standards for audits and is responsible for reviewing audits and disciplining accountants and accounting firms,

Bibliography

See N. A. H. Stacey, English Accountancy, 1800–1954 (1954); M. Backer, ed., Modern Accounting Theory (1966); L. Goldberg and V. R. Hill, The Elements of Accounting (3d ed. 1966); J. D. Edwards, History of Public Accounting in the United States (1960); A. J. Briloff, Unaccountable Accounting (1972); M. Chatfield, A History of Accounting Thought (1977).

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15 of the Best Books and Articles on: History of Accounting

as selected by Questia librarians

1.

The Institute of Accounts: Nineteenth Century Origins of Accounting Professionalism in the United States » Read Now
by Stephen E. Loeb, Paul J. Miranti Jr. 111 pgs.

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This work is an analysis of an important 'transitional' accounting organization, the Institute of Accounts.
2.

Studies in Accounting History: Tradition and Innovation for the Twenty-First Century » Read Now
by Atsuo Tsuji, Paul Garner. 282 pgs.

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Published in cooperation with the Accounting History Association of Japan, this volume brings together key essays presented at the World Congress on Accounting History held in Kyoto, Japan. Covering a wide range of topics, from 16th-century accounting practices in Spain to the development of the...
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Published in cooperation with the Accounting History Association of Japan, this volume brings together key essays presented at the World Congress on Accounting History held in Kyoto, Japan. Covering a wide range of topics, from 16th-century accounting practices in Spain to the development of the certified public accountants system in contemporary China, the volume illustrated the richness of the subject areas and research approaches being utilized in the field.
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3.

The Priesthood of Industry: The Rise of the Professional Accountant in British Management » Read Now
by Derek Matthews, Malcolm Anderson, John Richard Edwards. 380 pgs.

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The leading professional accounting bodies in Britain today boast more than a quarter of a million qualified members and accountants are moving into top management positions in increasing numbers. Accountants have become the foremost professional grouping in British business management. The...
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The leading professional accounting bodies in Britain today boast more than a quarter of a million qualified members and accountants are moving into top management positions in increasing numbers. Accountants have become the foremost professional grouping in British business management. The Priesthood of Industry documents the rise of the accountancy profession, from the handful of accountants listed in the trade directories of the major cities in the late-eighteenth century to the huge commercially-oriented firms of the late-twentieth century. The authors focus on the individual: the professional accountant, and adopt an economic determinist analysis to explain the rise of public practice and the transfer of staff to industry in increasing numbers. They also consider the routes through which this transfer of skills took place, and identify demand and supply side factors to explain the professional accountant's present hegemony in business management.
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4.

Japanese Accounting: A Historical Approach » Read Now
by Kyojiro Someya. 256 pgs.

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Much has been written about Japanese management practices, production systems and business culture but surprisingly little attention has been given to the development of accounting practices and approaches in modern Japan. Professor Kyojiro Someya, a former president of the Japanese Accounting...
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Much has been written about Japanese management practices, production systems and business culture but surprisingly little attention has been given to the development of accounting practices and approaches in modern Japan. Professor Kyojiro Someya, a former president of the Japanese Accounting Association and now Director of the Japan Accounting Research Institute, is one of the most distinguished accounting scholars in japan. In this book he presents an overview of developments under three main headings - Japanese Accounting History, Problems in Financial Accounting, and Cash Flow Accounting. Someya stresses that the focus of his research was shaped by the particular economic and business conditions in Japan. His work on cash flow accounting and fund flow analysis was done in the context of the problems presented by the high inflation in the immediate post war period; the work on financial statements was linked to the need to increase productivity; and his concerns for appropriate international reporting a reflection of the growing economic internationalization of the Japanese economy from the 1960s onwards. In this important and informed collection, Professor Someya also reflects on the broader meaning of accounting information in business and society, its role in business decision making, and the different ways in which it may be organized and presented in different business cultures.
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5.

Professionalism and Accounting Rules ("The Origins of Occupational Authority" begins on p. 46) » Read Now
by Brian P. West. 246 pgs.

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It is argued that the accounting profession is beset by an inferior and incomplete notion of quality in its work. This book investigates the issues raised by the vast array of accounting standards and technical rules, which have marked the recent history of accounting.
6.

How the U.S. Accounting Profession Got Where It Is Today: Part II, in Accounting Horizons » Read Now
by Stephen A. Zeff. 20 pgs.

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7.

Taking Account: Key Dates for the Profession, in Journal of Accountancy » Read Now
by Anita Dennis. 9 pgs.

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8.

The First Century of the CPA, in Journal of Accountancy » Read Now
by Dale L. Flesher, Paul J. Miranti, Gary John Previts. 7 pgs.

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9.

Taking Account of History: How Much and How Little Have Changed in a Century, in Journal of Accountancy » Read Now
by Anita Dennis. 3 pgs.

Collections: History, Entire Library
10.

Economic and Social History of Europe in the Later Middle Ages (1300-1530) (Chap. XIX "The Origin of Modern Business Methods") » Read Now
by James Westfall Thompson. 568 pgs.

Collections: History, Entire Library
11.

Luca Pacioli: Renaissance Accountant, in Journal of Accountancy » Read Now
by William L. Weis, David E. Tinius. 5 pgs.

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12.

The Stock Watering Debate: More Light, Less Heat, in Journal of Economic Issues » Read Now
by Eric R. Hake. 8 pgs.

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13.

A White-Collar Profession: African American Certified Public Accountants since 1921 » Read Now
by Theresa A. Hammond. 216 pgs.

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Among the major professions, certified public accountancy has the most severe underrepresentation of African Americans: less than one percent of CPAs are black. Theresa Hammond explores the history behind this statistic and chronicles the courage and determination of African Americans who sought to...
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Among the major professions, certified public accountancy has the most severe underrepresentation of African Americans: less than one percent of CPAs are black. Theresa Hammond explores the history behind this statistic and chronicles the courage and determination of African Americans who sought to enter the field. In the process, she expands our understanding of the links between race, education, and economics.
Drawing on interviews with pioneering black CPAs, among other sources, Hammond sets the stories of black CPAs against the backdrop of the rise of accountancy as a profession, the particular challenges that African Americans trying to enter the field faced, and the strategies that enabled some blacks to become CPAs. Prior to the 1960s, few white-owned accounting firms employed African Americans. Only through nationwide networks established by the first black CPAs did more African Americans gain the requisite professional experience. The civil rights era saw some progress in integrating the field, and black colleges responded by expanding their programs in business and accounting. In the 1980s, however, the backlash against affirmative action heralded the decline of African American participation in accountancy and paved the way for the astonishing lack of diversity that characterizes the field today.
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14.

From Accounting to Accountability: A Centenary History of the Australian National Audit Office » Read Now
by John Wanna, Christine Ryan, Chew Ng. 372 pgs.

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A centenary history of the Australian National Audit Office;
15.

The Audit Society: Rituals of Verification (Chap. 2 "Fraud, Expectations, and the Rise of Financial Audit") » Read Now
by Michael Power. 204 pgs.

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Since the early 1980s there has been an explosion of auditing activity in the United Kingdom and North America. In addition to financial audits there are now medical audits, technology audits, value for money audits, environmental audits, quality audits, teaching audits, and many others. Why has...
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Since the early 1980s there has been an explosion of auditing activity in the United Kingdom and North America. In addition to financial audits there are now medical audits, technology audits, value for money audits, environmental audits, quality audits, teaching audits, and many others. Why has this happened? What does it mean when a society invests so heavily in an industry of checking and when more and more individuals find themselves subject to formal scrutiny? The Audit Society argues that the rise of auditing has its roots in political demands for accountability and control. At the heart of a new administrative style internal control systems have begun to play an important public role and individual and organizational performance has been increasingly formalized and made auditable. Michael Power argues that the new demands and expectations of audits live uneasily with their operational capabilities. Not only is the manner in which they produce assurance and accountability open to question but also, by imposing their own values, audits often have unintended and dysfunctional consequences for the audited organization.
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