Financial Accounting--History of accounting, Father of Accounting, Father of accounting in India

1. 24-Aug-14 1Dr.Padma Shankar

2. Accounting is as old as civilization.
It was initiated in Babylonia and Egypt around 4000 BC.
Clay tablets was used to record the transaction.
Egyptians used account to record the safe keeping of
gold and the valuables in treasures. Day wise reports
were sent to wizards' by the in charges and Month wise
report to Kings.
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3. Babylonia was known as the city of commerce. Accounts
was used for business to uncover losses due to fraud
and to uncover losses due to inefficiency.
In Greece accounts was used to apportion the revenue
received maintaining total receipts/payments and
balance of government financial transaction. Coined
money was introduced in about 600 B.C.
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4. Romans used memorandum or day book
(adversaria) to record receipts and payments
and posted to ledgers or cash books (codex
acepti et expensi) on monthly basis (700 BC –
400 AD).
China used sophisticated governments accounts
during the Chao Dynasty. (1122-256B.C.)
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“give the trader without delay information as to his assets and
liabilities.”

6. Luco Pacioli is the father of accounting who introduced
Double Entry System of account in 1494 at Venice in
Italy.
Pacioli declares that a successful merchant needs three
things: sufficient cash or credit, good keepers and an
accounting system which allows him to view his finances
at a glance.
The trial balance (summa summarium ) is the end of
Pacioli’s accounting cycle. If the total of left side and
right side does not tally Pacioli says:
“that would indicate a mistake in your ledger, which mistake you
will have to look for diligently with the industry and intelligence
God gave you.”
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7. Double entry book keeping was developed in
the 14th century in Italy. The 7 “key ingredients”
which led to its creation as described by
A C Littleton are:
 Power to change ownership;
 Employing wealth productively;
 Widespread interchange of goods;
 Present use of future goods;
 Recording due to the limits of human brain;
 Money as the common denominator of exchange;
 Arithmetic – means of computing.
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8. Scotland occupies the place of priority of the
modern profession of accounting.
In Scotland we find the oldest existing societies
of public accountants.
The Edinburgh Society resolved to adopt the
name of “Chartered Accountant” (C.A.) for its
members in 1854.
George Watson (1645-1723) initiated the spread
of Accounting across the Globe.
In 1880 Institute of Chartered Accountants was
formed in England and Wales, designation of FCA
(Fellow Chartered Accountant ) and ACA
(Associate Chartered Accountant) came into
vogue.
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9. In India, 23 centuries ago, Chandraguptas Minister Kautilya
wrote a book named “Arthashastra.” describing how account
records can be maintained.
The Book has a chapter “the business of keeping up accounts
in the office of accountants.” This chapter describes how
records of accounts are to be maintained in accounts office
and the method of checking accounts.
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Shri K S Aiyar was a
pioneer of commercial
and accounting
education in India.
In India the Institute of Chartered Accountants of
India was established on 1st July 1949.

11. “What is surprising, however, is the durability of
the double entry approach during a period in which man’s
technology and social institutions – including business
itself – have become increasingly complex.”
……….Wolk, Francis and Teareney (1989)
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12. In the Current scenario with large scale of production, cut
throat competition, widening market, technological changes,
Accounting is :
 Recognized as a tool of mastering various economic
problems;
 To systematically write the economic history of the
organization;
 To provides information for decision affecting the
organization future;
 To be written in quantitative term,
 Partly of files of data partly of reports summarizing various
portions of these data, partly of the plan established by
management; and
 To guide the business operations.
(Gorden and Gorden Shilling law)
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13. http://uir.unisa.ac.za/bitstream/handle/10500/1935/
02chapter2.pdf
http://acaus.clubexpress.com/docs.ashx?id=16306
Garry D Carnegie, Lucia Lima Rodriguez, (2007), Exploring the
dimensions of the international accounting history community ,
Accounting History, 12:441, Sage Publications
http://kbsekm.blogspot.in/2010/05/k-s-aiyar-father-of-
accountancy-in.html
Jain , Narang, (1986), “Advanced Accounting, Kalyani Publications.
Reddy, Murthy (2007) Margham Publications.
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