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Enriquez, Kaye Alyssa T.

AC 521 1:30-2:30 MW August 17, 2018

Mendoza, Patricia Rose B.
Olvis, Rica Marie N.
Pernites, Thea P.
Tupaz, Ellaiza Khate

I. History and Development of Accounting

Researched by: Kaye Enriquez

The concept of currency

Somewhere between 10,000 and 15,000 years ago, human communities learnt to cooperate with one
another in a way that gave them access to a wider range of resources. Trade was no longer limited to those who had
goods that were valuable to each other, allowing people to benefit from the fruits of many other types of labor.

For this to work, they needed something to symbolize the exchange of resources; something offering a
common measure of value. Early money came in a variety of formats, from feathers and vodka, to cow dung and
grains. Coins didn’t emerge until between 500 and 700 BC.

Abstract counting
Both currency and accounting began through ‘concrete counting’, which means counting being object-
specific. So five boats would be represented by a different word or object than five apples.
It was only when objects, words and symbols began to be used to represent abstract numbers, such as in
Mesopotamia around 3,000 BC, that more complex forms of accounting could be developed. This also allowed the
birth of arithmetic.
With concrete counting, representations didn’t extend past a certain number of units, and different amounts could
not be added together. Abstract counting introduced the kinds of mathematical flexibility needed for systems like
double entry bookkeeping.
The origins of accounting
Accounting arguably began before the use of abstract counting. Around 7,500 BC, the Mesopotamians
were using small clay objects as counters for keeping account of goods. Each object represented particular quantities
of different types of commodities, such as food, clothing, and even labor.
They became increasingly complex over centuries, bearing intricate markings, and eventually, imprints of
these markings onto parchment replaced the counters themselves. According to many scholars, accounting and
writing evolved side-by-side in this way.
The need to keep a record of both goods and currency was accelerated by a number of factors. One was the
ability to accumulate personal wealth. Affluent members of society wanted to record what they had, what they
owed, and what was owed to them.
More than 5,000 years ago, Egyptian bookkeepers were keeping detailed records of the royal inventory,
using bone labels attached to goods like oil and linen to keep track of things such as owners, suppliers, and amounts.
Another factor was the rise of ruling entities such as royal families and governments.
A particular concern for these sections of society was finding more consistent ways to record and demand
tax. The growth of global trade meant commerce was happening on a much larger scale. Trading with vastly
different societies for diverse resources meant that traders could easily lose track of their activity without detailed
Double entry bookkeeping
Early forms of double entry bookkeeping arose in various locations at different times, such as the ‘four-
element bookkeeping system’ in Korea in the 11th century. However, the double entry bookkeeping system we’re
familiar with today was first properly described by Luca Pacioli in 1494. Referred to as ‘the father of bookkeeping
and accounting’, he defined much modern day thinking about debits, credits, journals, and ledgers.
He set out a comprehensive accounting cycle, which described a clear process for those involved with
accounts to follow. Among other things, he introduced ledgers based on assets receivables and inventories,
liabilities, capital, expenditure, and income accounts.
For double entry to flourish, a number of factors needed to be established and combined. This included
private property, capital, large-scale commerce, credit, systematised writing, money, and arithmetic. In 15th century
Europe, these things we coming together in just the right ways to set the scene for huge advances in accounting.

Source: https://babington.co.uk/blog/accounting/brief-history-of-accounting/

Earliest Record of Accounting

The earliest accounting records were found over 7,000 years ago among the ruins of Ancient Mesopotamia.
At the time, people relied on accounting to keep a record of crop and herd growth. They used accounting techniques
that are still used today to determine if there was a surplus or shortage after crops were harvested each season.

Accounting History During the Roman Empire

Later, during the reign of the Roman Empire, accounting continued to evolve much further. “The Deeds of
the Divine Augustus” is an account of Emperor Augustus’ financial dealings. It listed such quantities as distributions
to the people, grants of land, building of temples, money to military veterans, religious offerings, and money spent
on theatrical shows and gladiator events. This discovery hints at the scope of accounting information available to the
emperor, which he then probably used for planning and decision-making purposes. Roman historians also recorded
public revenues, the amount of money in the state treasury, taxes, slaves, freedmen, and more.
Luca Pacioli’s Contribution to the Accounting Profession
In 1494, Pacioli wrote Summa de Arithmetica, Geometria, Proportioni et Proportionalita, which included a twenty-
seven page treatise on bookkeeping titled, Particularis de Computis et Scripturis (Details of Calculation and
Recording) on the subjects of record keeping and double-entry accounting. Pacioli’s book became the reference text
and teaching tool on the subjects of bookkeeping and accounting for the next several hundred years. This was the
first time that symbols for plus and minus appeared in a printed book. This book was the first known published work
on the topic of double-entry bookkeeping. Summa Arithmetica was also the first known book printed in Italy to
contain algebra.

Accounting basics are also mentioned in the New Testament of the Bible in the Book of Matthew as well as in other
religious texts such as the Qur’an.

Accounting During the Middle Ages

During the Middle Ages, bartering was the primary form of money-changing, but when Europe changed to
a monetary economy is the 13th Century, merchants began relying on bookkeeping to keep record of multiple
transactions. This is when double-entry bookkeeping got its start, which is when a debit and credit value is entered
for each transaction by the accountant. Merchants at the time used accounting as an ad-hoc ordering system. It
provided them with constant information about their businesses that they could use in decision-making to grow their
business as they saw fit. This laid the foundation of how we use and understand accounting today.

Accounting Methods Today

Nowadays, there are accounting standards, auditing regulations, and ethical standards for accountants to follow.
Accountants and their peers handle the monetary ebb and flow of the economy. Obviously they are not the only
people responsible for this, but they play a huge role. Each business, company, corporation, government, and
individual must use at least basic accounting principles during their life, and often during their daily activities. It’s
an important element of business and over thousands of years has evolved into what we know it as in modern
accounting today.

Source: https://fremont.edu/history-of-accounting/
II. Why Accountants Need Effective Communication
Researched by: Kaye Enriquez

Why Accountants Should Be Able to Write

The pen, they say, is mightier than the sword: here’s why it helps when accountants can wield one

Generally speaking, accountants and finance professionals are known to be fairly “left-brained” – that is,
exhibiting a strong head for numbers, good problem-solving skills and high analytical intelligence.
While many accountants are blessed with strong verbal-linguistic intelligence, which entails ease with
reading and writing, others may feel less comfortable with the written word. But even though writing is rarely listed
as a formal job requirement, most accounting or finance positions will require at least some written communication.
And that means you’ll be expected to be able to string together a coherent sentence or two (among other things).

Basic communication calls for clear writing

We might think of accountants as dealing mostly with numbers, but their jobs actually require a fair amount
of basic communication with others. As an accountant, you need to answer clients’ queries, as well as pose them
questions of your own. You may have to communicate with the government – preparing notices of objections,
voluntary disclosures, and other special letters – and ensure proper documentation of purpose.

While none of these tasks necessarily require a high degree of eloquence, they do call for writing that’s
clear and concise, and that conveys the desired messages effectively. No one expects prose worthy of a Pulitzer
Prize; they do, however, expect that writing that meets professional standards of intelligibility.

But while writing is rarely listed as a formal job requirement, most accounting or finance positions require
at least some written communication.

You need to translate financial language

A financial statement might make perfect sense to you. All the technical data and terminology will, after
all, be crystal-clear to someone trained and versed in the principles of accounting. But for most of your clients, these
documents will probably read like gibberish – as indecipherable as a foreign language.

Sure, you might find it easy enough to explain this kind of complex financial and tax information to your
clients when you’re able to sit down and chat with them. But your job also requires that you provide lucid and
comprehensible explanations in writing. For example, some financial statements and special reports, as well as
certain tax forms for authorities, demand inclusion of written commentary or opinions from the firm.

In order to make this complex data accessible, you’ll need to strip away the jargon and convert the
information into terms that a layperson can understand. That means honing a writing style that’s simple, succinct,
and coherent.

Changing modes of communication

Gone are the days when picking up the phone and calling their accountant was the only way clients
communicated (outside in-person meetings). As modes of communication continue to evolve and proliferate,
extending to various forms of social media and ever-more miniaturized mobile devices, the written word is
increasingly pervasive. People are writing more today than ever before, even if they are doing so in less
conventional ways or through non-traditional mediums.

Whether it’s by e-mail, texting, or instant messaging, your correspondence with clients, co-workers, and
supervisors will throw a spotlight on your ability to compose readable sentences. What’s more, you need to adopt
the appropriate tone for each platform, while maintaining a consistently professional and straightforward idiom –
neither too formal nor overly casual.

People are writing more today than ever before, even if they are doing so in less conventional ways or
through non-traditional mediums.
Promotion and marketing
Now more than ever, building your brand – either your own or that of your company – is an indispensable
component of professional life. It’s a requirement for getting ahead in any industry.

Guide for new managers

If you run your own accounting practice, you will, like most professionals, be compelled to raise your
online profile across various social media, so that you don’t miss out on any important networking opportunities.
When you’re first building your practice, you’ll need to commit a lot of time and labour to writing newsletters,
marketing material, website content, or even a blog, to help get your name out there and drive traffic to your site.

In short, you’ll find that writing is a valuable skill to be able to draw upon, when you’re looking to build your capital
(or that of your company) and generate promotional materials. Whether you’re trying to craft a killer LinkedIn
profile, a pithy Twitter status update, or a thought-provoking blog entry, the ability to write well can make all the
difference for your efforts.

Sure, everyone and their grandmother has a blog or a Tumblr these days. But that’s all the more reason and incentive
for you to separate yourself from the crowd. The cream rises to the top: readers will always favour something that’s
been elegantly and compellingly written, over the woefully inarticulate or grammatically challenged jottings that
dominate the blogosphere.

In the final analysis, clients want accountants who can crunch the numbers and understand tax laws. But while a
facility with the written word won’t clinch their judgments of your expertise, an inability to write competently or to
convey your points clearly will tell against you. Poor writing makes you look unprofessional and unimpressive;
good writing, on the other hand, can command respect and confidence. Make sure that every word counts, then.