The Origins of Accounting
For as long as our society has had numbers, we’ve had a need for people who can crunch those numbers and make sense of them. The importance of data in general and financial data in particular has spanned decades and continues to play a significant role today. This continues to be seen with the vast amount and variety of accounting-related jobs that are currently available.
The Origins of Accounting
While there is no concrete record, it is assumed that the practice of accounting began in the pre-2000 B.C. era, which involved the trade of barter instead of currency. Until around the late 1400s, bookkeepers recorded transactions in a single column similar to how many of us record in our checkbooks. They also used cumbersome Roman Numerals to record transactions.
However, in 1494, an Italian monk named Luca Paccioli reworked the system to something that accountants are more familiar with today. He was the first person to describe double-entry accounting, showed how to use year-end closing techniques, and started the switch to the easier Arabic Numerals we use today.
Major Changes in Accounting
When the American railroad system transformed the way we moved goods and people, businesses started to see growth opportunities. They soon realized that if they wanted to expand, they needed to share these financials records to attract more capital. Management wanted to please shareholders by bringing in more profits, but shareholders needed an independent third-party to make sure management was being truthful.
This led to accounting being recognized as a profession in 1896. This is also when the title of certified public accountant was created, and people were required to pass a test before they could hold the title. It was perfect timing, since less than 20 years later demand for accountants skyrocketed when the government started charging income tax.
Growing Trends in Accounting
While those with a degree in accounting are still expected to have a good understanding of numbers, computers now play a larger role. However, technology isn’t replacing accountants; it’s simply helping them do their jobs. In fact, nearly 80 percent of bookkeepers and 4.5 million companies use Quickbooks in their everyday work.
Another growing trend in accounting is the field of forensic accounting. Here, accountants use their skills to detect fraudulent activities. They investigate claims, gather evidence, and then use this evidence to testify in court, if needed. They can also be hired to prevent fraud from occurring.
Finally, up until 2001, the International Accounting Standards stated how certain types of transactions were reflected in financial statements. Today, these standards are known as the International Financial Reporting Standards put forth by the International Accounting Standards Board. While the Board cannot require countries to follow these standards, many do require publicly traded companies to follow these new standards.
Opportunities That An Accounting Degree Can Present
After graduating, most accountants go on to find jobs working for smaller firms or even open their own successful practices. However, there are also large firms around the world where some accountants will work. At one time, the Big 8 in accounting firms dominated the field. However, due to dissolutions and mergers, we now have the Big 4: KPMG, Deloitte, Ernst & Young, and PricewaterhouseCoopers.
From its beginnings in ancient times to its modern use of technology, the world of accounting has evolved greatly. Today, the demand for professionals in this field continues to make it a popular career choice.