Simply to start with, we can predicit that accounting has got a very long history which is detected to start since prehistoric times of families. They started accounting by normal calculation for their own daily survival; for example; fooding, groceries, clothing and many more. Hence accounting is considered to be the oldest profession since long decade. This idea of accounting is an old practice which is being dated since Mesopotamia era. During the period, the trade that happened between tribes needed to be recorded on the stones and clay tablets. This is considered to be the oldest and foremost step of accounting in Egypt. Historians believe that the primary reason for the development of writing systems came out of a need to record trade and business transactions. Coming to 13th century the economy was moved towards monetary value, when merchants started depending on bookkeeping to check multiple simultaneous transactions being financed by bank loans. This occurred around 3600 Bc, where in those periods, the Copyists who had information and knowledge of related field; writing also worked as bookkeepers. In overall, all this bookkeeping and accounting trends have made significant commitments in the course of the last five and half thousand years. We can consider writing was accepted to be the real records of transactions from more than 5000 years prior. Eventually, Accounting ended up as a sever requirement of every individual as it was considered as a method of entering their benefits and belongings. If it was done so, it would be easy to turn out to lawful ownership. So one Professor of Charleston called accounting the Old Profession (L. Plunkett). In the end, keeping all records turned into a need for government to continue social request.
The famous name that looms recalling early history of accounting is Luca Pacioli, who in 1494 first portrayed the system of double-entry bookkeeping utilized by Venetian traders in his Summa de Arithmetica, Geometria, Proportioni et Proportionalita.the flourishment of double entry book keeping system required various variables t built up and combined. This included the personal property, capital, large scale business, credit, cash as well as systemized writing and calculation (arthimetic). Not only Venetian, various organizations and governments also had been recording data well before them. But actually it was Pacioli who was the first to depict the arrangement the method of debits and Credits in Journal book and ledgers that is still basis of present accounting system.
Modern system of accounting isnt something that happened overnight time by any certain events. It has reached to this present stage by passing an evolutionary process of thousand years which can be seen in different four stages i.e. Emergent stage(from primitive age to 1494 A.D. – Preanalytic stage 1495-1799- Analytical Stage 1800-1950- Modern age 1950-onward.
The modern civilization impelled the requirement for further more advanced cost bookkeeping frameworks. Whereas boom in business made a lot bigger external capital providers such as; shareholders, bondholders (who were not part in companys administration but had large influence in its outcomes). Later on accounting was transform to profession due to increase in public status (First in United Kingdom) which brought credibility for complex business practices that sparked the economy boom in latest century. As the need and demand for accounting increased with the time duration and civilization, the one who were dedicated for accounting and were highly expertise in all the accounting methods and information as well as would be trusted with all the incredible monetary responsibility were highly hired and called as Accountant. This person needed to be more aware of all the legislative changes than any other time in recent memory.
The idea for Chartered accountant came to fruition in mid-nineteenth century from Scotland. That was time for ideal opportunity and the respectability of the profession and all the various expertise working for accountancy while after a gathering of bunch of accountants petitioned Queen Victoria for a Royal Charter. Then after the Institute of Chartered Accountants was shaped in England and Wales towards the end of 19th Century. Extending rapidly, it presented formal assessments for its individual, with the assignments of Fellow Chartered Accountant (FCA) and Associate Chartered Accountant (ACA) which became highly looked after by many people. Later on 1973, Financial Accounting Standards Board (FASB) was established. The main objective was to build up standard money related accounting and detailing or recording. Such standard are significant for the creditors, investors, auditor and all other person who rely on valid and equivalent data about the accounting as well as funds of others. The FASB achieves the mission by acting to improve the helpfulness of financial reporting, keeping the current benchmarks, and instantly think of any flawed zones in strategies in methods of financial reporting, maintain the advance worldwide bookkeeping models, and also to improve the comprehension of the monetary reports.
Looking todays accounting, we can see that computers and various technology assume a very important job in the field of Accounting. Several numbers of software that is being developed everyday are doing most of accounting applications. All this new advancement is much more intuitive, helping are the accountants to accomplish their work in very minimal time with efficiency and effectiveness. Regardless of whether the procedure of accounting framework is manual or modernized, the basic underlying principles of accounting are similar. Accounting is being utilized worldwide in different ways for a wide range of organizations. The twofold section framework is broadly utilized as a general idea in bookkeeping. Business houses need to make the use of accounting to track the daily activities occurring in their company. In absence of bookkeeping standards, a firm would have to face a horrible situation to maintain and manage their data and transactions. With the help of double entry bookkeeping methods the records are effectively kept up. In current scenario with large scale production, cut throat competition, widening market, technologies changes accounting is being considered as a tool of mastering various economic problems as well as taken as guidance for the business operations which might affect the future directly or indirectly. The utilization of modern accounting system have added a more value to the one who have adopted it in their business transaction than those who havent. In the present dynamic economic, all the individual firms are trying very hard to be more competitive than compare to their rivals and adopting the updated accounting system has helped the firm to achieve the competitive advantages. Without the system of recording the organization may not be able to predict any shortages in the cash flow or in any other crucial resources which will hinder to record up-to-date profits and loss occurring within the business. Not only this, modern accounting have also helped managers set realistic strategic goals for the organization and also ensure that goals are achieved within the set time frame. One major point is traditional accounting system didnt give that level of attention to all internal as well as external cost controls and ended up mismatch of the expenses and revenue occurred in business whereas on other side modern accounting systems emphasize more for internal and external cost controls and therefore firms get the right match of their income and expenditure (Brynjolfsson and Hitt, 2000). The use of modern accounting have helped business house to grow from different aspects such as; making decisions regarding the pricing, marketing, resource planning, cost management, labor management and so on.
To summarize the recent modern-day accounting structure have led to the enhancement in the administration and the productivity of approximately all the present business organization. Apart from improved accounting systems most of the firms have had improved managerial operations derived from the recent accounting systems. The modernized technique of bookkeeping have made several major changes in the modern workplace; abridged the taxation troubles which is caused due to alteration in governments policy, easy access to monetary statements of any businesses, operate as an excellent tool for management organizations and more easier to report the transactions happening in organization.