How Accounting Civilized The World

The accounting industry evolved over 10,000 years ago with stone counters, in the Middle East. The first documented wealth was in Sumerian, using clay tablets. A Franciscan, friar, Luca Pacioli, invented formal double entry accounting. His works was published as a journal related to Mathematics.

The field of accounting was the preserve of only but a select few of wealthy merchants. For most of the last 300 years accounting was off limits for most people.

It can nevertheless be proven that the accounting industry spurred a host of technological inventions, and enabled humanity to keep track of economic transactions. The accounting industry also refined taxation, which was brutally imposed by rulers of the day.

Only in the last two centuries did substantial qualified accountants emerge. A critical shortage in this industry, however, still lingers. Vigorous head hunting for highly qualified accountants, internationally, is the norm.

The integrity of the industry was questioned at various stages in history, but not as seriously as in the 1920's to 1930's with the Great Depression, when many "profitable", companies went bankrupt, and in the early 2000's with all the corporate scandals. The International Federation of Accountants implemented IFRS to address shortcomings in the industry.

The scandals failed to destroy the industry. If anything, it emphasized the need for BETTER, improved accounting, with more oversight and control. The scandals only paved the way for accounting bodies to move away from complacency, to vigilance.

To this day, accounting remains relevant and important to its users.

The financial data recorded in any organization records can be used and manipulated (not unethically) in various ways, to reach conclusions about past, present and future financial performance of an organization.

A bank is virtually useless without and accounting system. Much is made of the importance of financial statements, which is true, but the intermediary information such as bank reconciliation's, debtors age analysis, creditors and cash flow reports are equally important.

Accounting compelled us to innovate. Humanity now had a tool, which enabled them to budget, to invent and operate accounting machines. Computers and accounting/ financial software took the world by storm from the 80's to date. All the outdated machines, books, and even spreadsheets were replaced by the best accounting software money can buy.

Industries such as banking, information technology, building, insurance, real estate, transport as well as governments, became structured and better organized, thanks to accounting.

Accounting and finance related queries can be addressed, on our website. Feel free to visit our site by clicking on the url below.

Sean Goss
website: http://www.sgafc.co.za

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