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Topics:
Bookkeeping and Accountancy
The Double-Entry System This system involves making at least two entries for every transaction: a debit in one account, and a corresponding credit in another account. The sum of all debits should always equal the sum of all credits. This provides an easy way to check for errors. This system was first used in medieval Europe.
Auditing
Use of Computers in Accountancy
Accounting Standards
Accountancy Bodies
Accountancy and the Law
Accountancy vs. Fraud
Accountancy and Taxation
The 'Big Five' Accountancy Firms
The 'Big Five' are the largest multinational accountancy firms. They are currently (2001):
History of Accountancy
According to some sources, the 'father of accountancy' was Luca Pacioli (also described as 'Friar Luca dal Borgo'?) (1445?-1517?), who is credited with the first publication of the 'Venetian method' of keeping accounts, now known as 'double-entry bookkeeping'.
From the public-domain Project Gutenberg Encyclopedia (1911) at: ftp://ibiblio.org/pub/docs/books/gutenberg/etext95/pge0112.txt
The art of accountancy on a scientific principle must certainly have been understood in Italy before 1495, when Friar Luca dal Borgo published at Venice his treatise on book-keeping; but the first known English book on the science was published in London by John Gouge or Gough in 1543. It is described as A Profitable Treatyce called the Instrument or Boke to learn to knowe the good order of the kepyng of the famouse reconynge, called in Latin, Dare and Habere, and, in Englyshe, Debitor and Creditor.
A short book of instruction was also published in 1588 by John Mellis of Southwark, in which he says, "I am but the renuer and reviver of an auncient old copie printed here in London the 14 of August 1543: collected, published, made, and set forth by one Hugh Oldcastle, Scholemaster, who, as appeareth by his treatise, then taught Arithmetike, and this booke in Saint Ollaves parish in Marko Lane." John Melfis refers to the fact that the principle of accounts he explains (which is a simple system of double entry) is "after the forme of Venice."
The very interesting and able book described as The Merchants Mirrour, or directions for the perfect ordering and keeping af his accounts formed by way of Debitor and Creditor, after the (so termed) Italian manner, by Richard Dafforne, accountant, published in 1635, contains many references to early books on the science of accountancy. In a chapter in this book, headed "Opinion of Book-keeping's Antiquity," the author states, on the authority of another writer, that the form of book-keeping referred to had then been in use in Italy about two hundred years, "but that the same, or one in many parts very like this, was used in the time of Julius Caesar, and in Rome long before." He gives quotations of Latin book-keeping terms in use in ancient times, and refers to "ex Oratione Ciceronis pro Roscio Comaedo"; and he adds: "That the one side of their booke was used for Debitor, the other for Creditor, is manifest in a certaine place, Naturalis Historiae Plinii, lib. 2, cap. 7, where hee, speaking of Fortune, saith thus:
Huic Omnia Expensa. Huic Omnia Feruntur accepta et in tota Ratione mortalium sola Utramque Paginam facit."
An early Dutch writer appears to have suggested that double-entry book-keeping was even in existence among the Greeks, pointing to scientific accountancy having been invented in remote times.
There were several editions of Richard Dafforne's book printed---the second edition having been published in 1636, the third in 1656, and another was issued in 1684. The book is a very complete treatise on scientific accountancy, it was beautifully prepared and contains elaborate explanations; the numerous editions tend to prove that the science was highly appreciated in the 17th century. From this time there has been a continuous supply of literature on the subject, many of the authors styling themselves accountants and teachers of the art, and thus proving that the professional accountant was then known and employed.
Very early in the 18th century the services of an accountant practising in the city of London were made use of in the course of an investigation into the transactions of a director of the South Sea Company, who had been dealing in the company's stock. During this investigation the accountant appears to have examined the books of at least two firms of merchants. His report is described Observations made upon examining the books of Sawbridge and Company, by Charles Snell, Writing Master and Accountant in Foster Lane, London.
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