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Amah Kalu Ogbonnaya
Email: kaluogbonnaya30@yahoo.com
(College of Management Sciences, Department of Accounting,
Okpara University of Agriculture, Umudike

This work traces the History of Accounting, how Merchants
developed a system of keeping record using what is known as
the Bollac. The stages of Development of Accounting, from the
Mesopotamia 3500B.C to the 21st century Accounting. This
study also talked about the Father of Accounting Luca Pacioli
his contribution in the Development of Double Entry
Bookkeeping and finally the relevance of Accounting History to
todays world.
Key Words: Accounting History, Bollac, Double Entry
Mesopotamia, Luca Pacioli, keeping

Accounting is one of the oldest Professions. The history of
accounting dates back to the earliest days of civilization driven
by the trade system of crops and products necessary for
Accounting was born before writing of numbers exited,
some 10,000years ago, in area known as Mesopotamia this is
late Persia and now the countries of Iran and Iraq. Tigris
Euphrates River, a large fertile area with a large thriving
population and active trading between towns and cities are all
located within the area.
At that time Merchants faced many of the same problems
which business of today is facing .They had to ship their
merchandize up and down the river and that meant entrusting a
boatman with their goods. Unfortunately, not all the boatmen
were honest, and disagreement often arose how much was
shipped versus what was received at the other end. It is hard
for us to imagine a world without writing and numbers. Then to
imagine yourself in their position what will you do.
To deal with the problem, Merchants came up with a plan.
They made small clay token, of various shapes and with various
markings, to indicate different products. This was known as
bollac system, one shape might be used for a basket of grain
while another will be used for a pot etc. They had over 200
shapes to differentiate a large verity of common goods
including food, leather, clothing and utensils etc. The system of
using bollac continued for almost 5,000 years before the
invention of writing and numbers
More fundamental is the question, why should we care
about the history of accounting at all? Certainly a glimpse back
into this period helps not just the past, generally, it is a sort of

minding twisted path that makes for a better future. However,

it equally helps to explain the phenomenal growth that the
profession of accounting has enjoyed worldwide. It is interesting
to note that the Mediterranean and European nation had no
concept of the number zero until the Middle Ages. The learned
the concept of zero from Middle Eastern mathematicians, who
also knew about it.
During this era, as farmers prospered, service businesses and
small industries developed in the communities in and around
Mesopotamian valley. The cities of Babylon and Nineveh
become the centres for regional commerce, and Babylonian
became the language of business and politics throughout the
Near East. There was more than one banking firm in
Mesopotamia employing standard measures of gold and silver,
and extending credit in some transactions.
At this time Sumeria was a theory whose rulers held most land
and animals in trust for their gods, giving impetus to their
record-keeping efforts. Moreover, the legal codes that evolved
penalized the failure to memorialize transactions. The
Mesopotamia equivalent of today`s accountant was the scribe.
Whose duties were similar, but more extensive .In addition to
writing up the transaction, he ensured that agreements were
compiled with the detailed code requirement for commercial
transactions. Temples, palaces and private firms employed
hundreds of scribes and it was considered a prestigious
In a typical transaction of the time, the parties might
sought for the scribe at the gates to the city; they would
describe their agreement to the scribe, who would supply a
small quantity of specially prepared clay on which to record the
transaction. Clay was plentiful in that area, while papyrus was
scarce and expensive. The moist clay was moulded into size

and shape adequate to contain the terms of the agreement. The

scribe recorded the names of the contracting parties, the goods
and money exchanged and any other promises made. The
parties then signed their names on the tablet by impressing
their respective seals. In an age of illiteracy, men carried their
signature around their necks in the form of stone amulets. For
extra security, the whole transaction would be rewritten on the
outer crust, in effect making a carbon copy of the original.
Attempted alteration of the envelope could be detected by
comparing it with its contents.






Ancient Egyptians bookkeepers kept meticulous records of

inventory of goods kept in royal storehouses. The accuracy of
these records was assured by the swift and severe penalty that
came if mistakes were ever discovered. Archaeologists Dr
Gunter Dreyer of the German institute of Archaeology
discovered 5,300-year-old bone labels inscribed with marks and
attached to bags of oil and linen in the Abydos, Egyptian tomb
of King Scorpion 1. Describing inventory owners, amount and
suppliers, these labels of antiquity are known to be the ancient
origin of the counting system that would eventually develop
into sophisticated accounting methods were familiar with today.
In ancient Greece, the account books of bankers show that they
change and loaned money and help people make cash transfer
through affiliate banks in other cities. In ancient Rome,
government and banking accounts grew out of records kept by
the heads of families.


The most important event in accounting history is
generally considered to be the dissemination of double-entry
bookkeeping by LucaPacioli in 14th Century Italy. He was much
revered in his days, and was a friend to Leonard da Vinci. In

fact, the Italians of the 14th to 16 centuries are widely

acknowledged as the father of modern accounting and were the
first to commonly use Arabic, rather than Roman numerals for
tracing business accounts
The modern formal accounting profession in Scotland in 1884,
when Queen Vitoria granted a Royal Charter to the Institute of
Accountant in Glasgow, creating the Profession of Chartered
Accountant (CA). Today the longest standing societies of Public
Accountants are found in Scotland. In the late 1800, Charted
Accountant from Scotland and Britain came to U.S to audit
British investment, some of these Accountant stayed back in
U.S setting up accounting firms. The first national U.S
accounting society was set up in 1887.





The accounting profession in the 20 th century developed

around, at first, state requirement for financial statement
audits, and then around Federal requirement created by
securities act pass in 1933 and 1934(which created the
Securities and exchange commission).In the 1970s congress
and SEC demands for more reliable and comparable financial
reporting led to the funding of the Financial Accounting
Standard Board (FASB) in 1973. The FASB and the Governmental
Accounting Standard Board (GASB) are now two of the main
organization responsible for establishing generally accepted
accounting principles (GAAP) in the U.S.
Beyond the industrys self regulation, the government also set
accounting standard, through agencies such as the Securities
and Exchange Commission and Laws such as the SarbanesOxley Act of 2002, passed after the Enron and WorldCom

accounting scandals. The 21st century also saw the passage of

Dodd-Frank Act after the recession of 2008. This act which
contains 16 major areas of reform, including creation of
financial stability, oversight council and Volcker Rule that
restricts banks from owning, investing, or sponsoring hedge
funds, private equity funds, or other types of proprietary trading
operations that result in their own profit.
The history of accounting is not compete without Luca Pacioli
(1445-1517) also known as Friar Luca dal Borgo and the
Farther of Accounting. Pacioli is credited for the birth of
accounting .In 1494; he wrote a book that was a compilation of
the Mathematical and Accounting Knowledge of his time. They
book provided the first printed description of the double entry
accounting system used by Venetian Merchants in the late 15 th
century including a similar accounting cycle as we know it
Pacioli does not refer to the origins of double entry
bookkeeping. He however, by no means claim to have invented
the system, explicitly stating that his work is a reflection of
Venetian accounting rules as developed through trade. Although
double entry comprises theory, form and technology. Pacioli
stressed practicality and the fundamental duality of each
transaction. Traders using his standardized method of recording
transaction had immediate information on their assets and
liabilities without theorizing, Pacioli revealed an understanding
of concepts basic to bookkeeping. He recognized for example,
the relationship between nominal and capital accounts inherent
in proprietorship accounts or financial statement. He failed to
recognize depreciation or periodic closing, and assigned only
minor importance to fixed assets.
The Bookkeeping method of Luca Pacioli has the following
distinct character tics:

Pacioli wrote that there are three things needed by one who
wish to carry on business diligently. The most important of
these is cash or any other substantial power (aitra facuita
substatiale). The second is good accountant (Buon ragioneri)
and a sharp bookkeeper. The third is good order in order to
arrange all business to debit (debito) and crdit (credito)
Pacioli explained the opening inventory (inventario), but he did
not describe the closing inventory.
Paciolis account book systems are three account books is a day
book. The day book is the first book, the journal is the second
book and the ledger is the third book.
All things pertaining to a transaction must be written in the day
book, without omission. Pacioli wrote that no point be omitted in
the day book.
Pacioli described debit and credit that is per and A in the
jounrnal and die darc in the ledger(Garner and Tsuji 1995)
However, any view of accounting history that begins with Luca
Paciolis contribution will
Overlook a long evolution of accounting system in ancient
mediaeval times. In attempting to explain why double entry
bookkeeping developed in 14th century Italy instead of ancient
Greece or Rome, accounting scholar A.C.Littleton describe
seven Key Ingredient which led to its creation.
-Private Property: The power to change ownership, because
bookkeeping is concerned with fact about property.
-Capital: Wealth productively employed, because otherwise
commerce would be trivial and credit would not exit.
-Commerce: The interchange of goods on a widespread level,
because purely local trading in small volume would not create
the sort of press of business needed to spur the creation of an
organized system to replace the existing hodgepodge of record

-Credit: The present use of future good, because there would

have been little impetus to record transaction. Completed on
the sport.
-Writing: A mechanism for making a permanent record in a
common language, give the unit of human memory.
-Money: The common denominator for exchange, since there
is no need for bookkeeping except as it reduces transaction to
set of monetary values.
-Arithmetic: A method of computing the monetary details of
the deal.
Many of these factors did not exist in ancient times but until the
middle Ages, they were not found together in a form and
strength necessary to push man to the innovation of double
In making accounting history relevance, accounting historians
must address the challenge of demonstrating the applicability
of historical accounting to their target audiences. History is
unavoidable, in the contemporary society it impacts in us; it is
the currency of everyday life in the global technological post
modern era. Our history is reflected in our fashions, customs,
tradition, medical diagnoses, family and legal precedents
.Hamerow(1987) and Standford(1998) argue that history is
indigenous and instinctive to all of us a spontaneous and deepseated interest in the part. Publicly and privately we both
consciously and unconsciously draw on an interpret our beliefs
about and experience of the past when making decisions
(Parker 1999).
In order to persuade others of the relevance of accounting
history, accounting historians need to draw out the
contemporary relevance and implications. It is a task of
embedding traces that contribute to the agenda, on the
pathway is through the contextualization of our historical

accounts, not only retaining what happened as they did and to

attempt to relate any connection between what was and what is
Accounting history can and should offer precedent probabilities
and choices reflection upon what has marked in the past and
what has not and why. Ultimately historys importance arguably
lies in its perceived relevance and utility for contemporary
audience, so the better accounting historians can articulate the
interrelationship between historical actions, technologies and
contemporary accounting issues. Indeed history influences our
perception of the future so that even instinctively it can feed
into future behaviour and event. (Parker2004).Therefore
accounting historians should strike to identify the lesson to be
learned from their investigation.
As Robert Warren stated History cannot give us a program
for the future but it can give us a fuller understanding of
ourselves and of our common humanity so that we can better
face the future (Warren 1961). The importance of past
dependence knowing how we got to where we are should not be
underestimated. Some sense of this notion is evident in the way
which accounting standards setters often provide a narrative of
how standards develop and the previous version were inferior.
Notwithstanding such an orientation studies of this genre may
augment an understanding of the complex evolution of
accounting standards and in the process help to enhance
apperception of the standards themselves. Accounting history
also encourages self consciousness about both the existence
and foundation of our customs and conventions.
If we are not aware of the ways in which accounting today i
s different from accounting in the past and how accounting has
come about. (Whether we regard the most legend way of
understanding this process, of coming into being as involving
notions of evolution, conditions of possibility, path dependency
or some other explanatory scheme.) In recent years the notion

of Public History has been employed as a focus for studying how

those who are not Professional historian acquire their sense of
the part.
Public history is a broad field which embraces historical work
carried out in the community and in organizations which include
the complication of oral histories whereby members of
communities narrate their own stories about how the use and
are affected by accounting .Accounting history have the
opportunity and perhaps the responsibities, to help ensure that
policy makers are historically informed, of course it cannot be
historically informed policy but it may at least ameliorate the
risk associated with proceeding without knowledge of relevant
1) It helps to explain the phenomenal growth that the
profession of accountancy has enjoyed worldwide since the first
royal charters were granted to society of Accountant in
Edinburgh less than 150 years ago.
2) The history of accounting throws light on economic and
business history generally, and may help us better predict what
is on the horizon as the pace of global business evolution
3) Accounting history also offers precedents probabilities and
choices; a reflection upon what has worked in the past and what
has not and why?
4) Importance of path dependency is another relevant of
accounting history i.e. knowing how we got to where we are in
which accounting standard setters often provide how standard
5) History of accounting also tells us how record keeping of
fifteenth and beginning of the sixteenth century developed into
bookkeeping as it is known today.


6) Accounting history encourages the establishment of an

archival collection of Accounting Records.
7) It also encourages interest in Accounting History in general
and promoting the study in general.
8) Accounting History serves as to advance an understanding of
the integration of accounting and its Socio-economic and
political environments within historical context.
9) Accounting History promotes the study of accounting as a
social practice as well as a technical practice and encourages
the identification of the impact of accounting and accounting
change on organisational and social functioning and

Accounting History continues to provide historical perspective

on current issues and may inform or guide contemporary and
future decision makers on accounting, organisation and social
policy and associated regulatory developments.

The basic premise underlying our conclusion that
accounting history matter is that as time unceasingly transfer
the present into the part it does so without erasing its
relevance. What has gone before remains important to
understanding and acting in the present and anticipating and
preparing for the future? As Mark Twain is said to have
commented-History never repeats itself but it rhymes. The path
to ensuring that accounting history matters and continues to
matter more over time is for accounting history scholars to
achieve the highest standard in their will and act as effective
advocates for it.


Hamenow, T.S. (1987) Reflection on History and Histories,
winconis; the
University of Wisconsin Press.
Parker, I.D. (1999) Historiography for the New Millennium:
Accounting and Management, Accounting History,
Vol.4. No2.
Parker, I.D. (2004) Presenting the Past: Perspective on Time for
History, Accounting Business and Financial History,
Vol.14 No1
Stanford, M, (1995). An Introduction to Philosophy of History:

Warden R.P.(1961) The legacy of the civil war, New York:
Random House.