THE ASSET
1
• HISTORY OF
ACCOUNTING
2
• LUCA PACIOLI: THE
FATHER OF MODERN
ACCOUNTING
3
• DEFINITIONS OF
ACCOUNTING
4
• CAREERS IN
ACCOUNTING
2014 EDITION
VOULUME 1; ISSUE 1
A
ccounting is involved in the recording, analyzing,
classifying and interpreting of the financial affairs
of a business. Accounting is a science that is
involved in the recording, monitoring and assessment of the
financial affairs of a business at any time.
Accounting was developed in ancient times. The
system we have today arose from that ancient development.
We know that previous communities kept primitive records
by way of drawings on rocks or caves or cutting into trees.
Later on these records were put onto stone and paper which
were a lot easier to use and had a longer life. One of the first
editions of complete documentation about how to keep
books of accounting was written by a professor of
mathematics in Rome. This documentation described the
double-entry system of accounting which was used by the
Venetian merchants. It was adopted and still used today
around the world.
1
THE ASSET
2014 EDITION
VOULUME 1; ISSUE 1
1880 - In 1880, the Institute of Chartered Accountants in
England and Wales was formed, bringing together members
from a number of individual accounting organisations. The
newly formed institute developed standards of conduct and
examinations
for
admission.
Books such as Book-keeping exercise for accountant
students, The student’s business methods and commercial
correspondence and Australian
elementary
bookkeeping represent examples of the shift towards
professional education and accreditation in the accountancy
profession.Double Entry Bookkeeping for technical classes
and schools gives examples of civil service examination
papers for accountants from this period.
20thCentury
On the 19th of June 1928, a Royal Charter was granted by
George the Fifth, establishing The Institute of Chartered
Accountants in Australia upon recognition that the
“profession of Public Accountants in the said
Commonwealth [Australia] is practiced by a considerable
number of persons and the duties and functions of such
public accountants are of great and growing importance in
respect of their employment in the capacities of Liquidators
acting in the winding up of Companies and of Receivers
under Decrees and Trustees in Bankruptcy or Insolvency,
arrangements with creditors and in various positions of trust
under the Courts of Justice in the said Commonwealth of
Australia, and also in the auditing and certification of the
accounts of Public Companies and other business, and
various other kindred matters, in all of which a technical
knowledge of the duties imposed is of essential
importance.”
Biography
Name : Luca Bartolomeo Pacioli
aka : Fra Luca Pacioli
Birth date : 1446 – 1447
Died: June 19, 1517
Parents: Bartholomeus Pacioli
Education
his teacher was Piero della Francesca
attended mathematics lecture at
mathematician Domenico Bragadino in
the Scuolo di Rialto
Work
“The
quest for our origin is the sweet fruit's
juice which maintains satisfaction in the
minds of the philosophers.” (Luca Pacioli)
teaches university mathematics at
different Italian universities
author of different books of
mathematics
chair in mathematics of two
universities
private tutor of mathematics
taught mathematics to Leonardo da
Vinci
2
THE ASSET
I
n 1494, the first book on double-entry accounting was
published. The author was an Italian friar, Luca Pacioli.
His impact on accounting was so great that five
centuries later, accountants from around the world gathered
in the Italian village of San Sepulcro to celebrate the
anniversary of the book's publication.The first accounting
book actually was one of five sections in Pacioli's
mathematics book titled "Everything about Arithmetic,
Geometry, and Proportions." This section on accounting
served as the world's only accounting textbook until well
into the 16th century.
ince Pacioli was a Franciscan friar, he might be
referred to simply as Friar Luca. While Friar Luca is
often called the "Father of Accounting," he did not
invent the system. Instead, he simply described a method
used by merchants in
Venice during the Italian
Renaissance period. His
system included most of
the accounting cycle as we
know
it
today.
For example, he described
the use journals and
ledgers, and he warned that
a person should not go to
sleep at night until the
debits equalled the credits!
His ledger included assets
(including receivables and
inventories), liabilities, capital, income, and expense
accounts. Friar Luca demonstrated year-end closing entries
and proposed that a trial balance be used to prove a
S
2014 EDITION
VOULUME 1; ISSUE 1
balanced ledger. Also, his treatise alludes to a wide range of
topics from accounting ethics to cost accounting.
umerous tiny details of bookkeeping technique set
forth by Pacioli were followed in texts and the
profession for at least the next four centuries, as
accounting historian Henry Rand Hatfield put it, "persisting
like buttons on our coat sleeves, long after their significance
had disappeared." Perhaps the best proof that Pacioli's work
was considered potentially significant even at the time of
publication was the very fact that it was printed on
November 10, 1494. Guttenberg had just a quarter-century
earlier invented metal type, and it was still an extremely
expensive proposition to print a book.
ccounting practitioners in public accounting,
industry, and not-for-profit organizations, as well as
investors, lending institutions, business firms, and
all other users for financial information are indebted to Luca
Pacioli for his monumental role in the development of
accounting.
N
A
It is a service activity. it's function is
to provide quantitative information,
primarily financial in nature, about
economic entities, that is intended to
be useful in making economic
decisions.
ACCOUNTING STANDARDS COUNCIL
Accounting is an art or recording,
classifying and summarizing in a
significant manner and in terms of money,
transactions and events which are in part
at least of a financial character and
interpreting
the
results
thereof.
AMERICAN INSTITUTE OF CERTIFIED
PUBLIC ACCOUNTANTS
Accounting is the process of identifying,
measuring and communicating economic
information to permit informed judgment
and decision by users of the information.
AMERICAN ACCOUNTING ASSOCIATION
3
THE ASSET
A. Public accounting can be viewed as firms
of accountants that serve clients such as business
individuals, nonprofits and governments. The services
provided by public accounting firms will vary by the
size and the expertise of the firm.
The people employed in public accounting are often
certified public accountants or CPAs. Many accountants
leave the larger public
accounting firms after several
years of experience and
become an employee of a
single business. In their new
position they will be referred
to as a private accountant,
corporate
accountant
or
internal
accountant.The
positions in public accounting
often consist of staff, senior,
manager and partner. Public accounting services:
review, and auditing of the clients' financial
statements
tax work including the preparation of income tax
returns, and estate and tax planning
consulting and advice involving accounting systems,
mergers and acquisitions
2014 EDITION
VOULUME 1; ISSUE 1
B. Private Accounting
C. Government Accounting
Private accountants perform many of the customary
functions as any other type of accountant. However, their
duties do differ somewhat
from those of the other
typical
types
of
accounting: public and
governmental accountants
and
internal
auditors.
Private accountants are
also known as management
or corporate accountants.
They
often
achieve
executive level positions
within their companies.
Private accountants
are concerned with the collection and analysis of financial
data strictly within a particular company. The work of
private accountants is provided to other managers and
executives within the
firm as tools to allow
them to make business
decisions based on sound
financial data. Private
accounts are also usually
charged
with
performance evaluation,
cost
management,
budgeting and asset
management within the
company. They are often
also involved with strategic planning and developing new
products.
Public sector accounting refers to the field of
accounting that specifically finds application in the
public sector or government. A special field of
accounting exists because: - The objectives to which
accounting reports to differ significantly from that for
which generally accepted accounting practice has been
developed for in the private (business) sector; and - The
usage of the results of accounting processes of
government differs significantly from the use thereof in
the private sector.
The governmental accounting system has a different
focus for measuring accounting than private sector
accounting. Rather than measuring the flow
of economic
resources,
governmental
accounting measures
the flow of financial
resources. Instead of
recognizing revenue w
hen they are earned
and expenses when
they are incurred,
revenue is recognized
when
there
is
money
available
to
liquidate liabilities within the current accounting period,
and expenses are recognized when there is a drain on
current resources.
4
THE ASSET
D.
2014 EDITION
VOULUME 1; ISSUE 1
Academe/ Accounting Education
Certified public
accountants can also be part of
the academe. They can be
instructors for accountancy
students
in
a
certain
university,
speakers
in
seminars, review sessions and
trainings for accountants,
authors for books and the like.
Benefits of a CPA Career
Today, the CPA credential equates to a world of
possibilities. Gone are the days of back-room numbercrunchers and in their place are a diverse group of
professionals involved in shaping the futures of the
businesses and individuals they serve. Today's CPAs are
the CEOs and CFOs of major corporations, technology
managers, forensic experts and much more. Following
are the Top 10 Benefits of a career as a CPA.
1. Job Satisfaction
2. Diversity of Career Options
3. Creativity
4. Challenging and Rewarding Work
5. Job Security
6. Opportunity to Contribute to Society
7. Involvement with People
8. Financial Security
9. Intellectual Development
10. Prestige
5
THE ASSET
2014 EDITION
VOULUME 1; ISSUE 1
6