Author: Angel

The accounting profession has been recognized at a professional level since the 1900s. Professional accounting bodies have consequently been set up to establish the standard of professional qualification as well as to enforce the International Code of Ethics for Professional Accountants (PAs).

In 1969, the Accounting Standards Steering Committee was established in England and Wales to issue a Statement of Standard Accounting Practice (SSAP). The objective of the SSAP is to allow, by way of standardizing accounting practices, for a fair comparison of the performances and financial positions among business firms during the accounting year.

Following an agreement between accounting agencies from Britain, the United States of America, Canada, Australia, Ireland, Netherlands, France, German, Mexico, and Japan, the International Accounting Standards Committee (IASC) was established in London in 1973, and had provided accounting standards known as the International Accounting Standards (IAS).

In April 2001, however, the Committee was replaced by the International Accounting Standards Board (IASB). The  IASB, while retaining the standards previously issued by the IASC, has since taken over the development of globally-acceptable and comprehensible accounting standards under the International Financial Reporting Standards (IFRS) Foundation.

In Malaysia, the Malaysian Institute of Accountants (MIA) is established under the Accountants Act 1967, thereby becoming the only accountancy body

Early Development of Record-keeping in Ancient Civilizations

The earliest accounting records were found in Babylonia in 3500 BC, where clay sheets were used to keep records. The method of storing records was subsequently improved with papyrus (paper) and calamus (pen) which discovered in Egypt in 400 BC. In the 5th and 6th centuries BC, transactions were recorded based on the value of money. The record-keeping system was developed when the Roman numerals were replaced by the Hindu-Arabic numerals system in 850 AD.

The industrial revolution in England during the 18th century has developed not only their trading activity but also the bookkeeping. The high demand for mass industrial production has led to the formation of a cost accounting system. This system enabled a comprehensive analysis of mass production to be done. The development in bookkeeping was first initiated by the formation of the company. In a particular company, the management of a company needs to present the accounting reports to the shareholders who are the owners of the company. This purpose which is represented by Yearly Financial Statement needs to be prepared based on minimum financial standards. This process is called as financial accounting.

The account management sector resulted from the expeditious development in a business organization during the 20th century. All of the accounting information was utilized by the management in making a decision and handling the company more efficiently.

The records system is believed to have started in Italy in the 14th century in line with trade developments. In 1491, Luca Pacioli, a mathematician and an Italian Franciscan monk published his mathematical book entitled Summa de Arithmetica, Geometria, Proportioni et Proportionalita in Venice. This book is the first book of accounting ever published and a section on the bookkeeping regulations can be found in it. The bookkeeping based on the record is known as the Venetian Method. Since the introduction of double entry bookkeeping, this system is the basis of accounting records for all forms of organization and business until today. Luca Pacioli is a pioneer in accounting and is known as “Accounting Father”.