Academic journal article Journal of Business and Behavior Sciences

Accounting History in Perspective: Uniform CPA Exam Turns 100

Academic journal article Journal of Business and Behavior Sciences

Accounting History in Perspective: Uniform CPA Exam Turns 100

Article excerpt


The practice of accounting can be traced back nearly 6,000 years. Rudimentary accounting records were first discovered in approximately 4000 B.C. in the form of records of income from temples in lower Mesopotamia (ICAEW, 2015). More advanced accounting records, using the double entry format, were discovered in the "Massari Ledgers" of the Commune of Genoa of 1340. This was significantly earlier than 1494 when Luca Pacioli's "Summa" was first published (Peragallo, 1956). Since little verifiable information remains concerning the Massari Ledgers, Franciscan Friar and mathematician Luca Pacioli continues to be recognized as the "Father of Accounting and Bookkeeping." His 27 page "Summa" was sold to merchants of the period as a reference text. It was also the first known text to contain algebra and the symbols for plus and minus. These symbols became standard notation for mathematicians during the Italian Renaissance period (Sangster, Stoner, McCarthy, 2007).

The practice of accountancy spread rapidly following Pacioli's contributions with accounting texts becoming available in England. According to the Institute of Chartered Accountants in England and Wales (ICAEW), one of the earliest accounting societies known, an early text by Hugh Oldcastle printed in London in 1543 discussed the "Debitor and Creditor" relationships and explained methods to keep books in good order (ICAEW, 2015). Also, according to the ICAEW, Robert Colinson authored the first Scottish accounting text in 1683. He discussed, in his text, the art of bookkeeping using the Italian Method, which utilized the concept of debits and credits in accounting entries.

The practice of accountancy spread throughout the world prior to the creation of professional accounting associations, which typically required the passing of an examination or series of exams in order to gain membership to the group. In the late 1700's in Scotland, business directories published in large cities listed individuals who practiced accounting. This occurred prior to the creation of any formal association or society (Brown, 1905). These accountants were, no doubt, the predecessors to Scottish accountants who created the first profession accounting society approximately fifty years later.

Since professional accountancy examinations evolved with the formation of professional accounting societies, a brief review of the first accounting societies is in order. The first professional accounting association was created in Scotland in 1854. These early accountants, in an effort to limit competition, created professional examinations. Scottish accountants, according to Lee, identified a major threat to their financial well-being (Lee, 1996).

Legislation proposed in London to base all Scottish insolvency practice on English legal provisions basically meant that only lawyers, not accountants, could administer Scottish insolvency cases. This encouraged Scottish accountants to unite, and between 1854 and 1856 they obtained public support and backing of Scottish members of Parliament to defeat the proposed legislation. During the period of 1854 to 1867, a number of professional accounting societies were formed. In turn, these organizations required the passing of professional examinations in order to being accepted into membership. These early examinations were typically extremely rigorous in order to limit the number of practicing accountants. By decreasing competition, practicing accountants of the period charged topmost rates for their services.


Professional accounting associations originated in Scotland in the mid1800's. With the advent of these organizations came the development of professional accounting examinations which would provide a method to verify the person's knowledge of accounting and related business topics. The rigor of the exams determined the number of individuals accepted into the elite group of professional accountants. …

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