Journal of History Culture and Art Research (ISSN: 2147-0626)
Tarih Kültür ve Sanat Araştırmaları Dergisi Vol. 6, No. 4, September 2017
Revue des Recherches en Histoire Culture et Art Copyright © Karabuk University
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DOI: 10.7596/taksad.v6i4.1163
Citation: Mukhametzyanov, R., Nugaev, F., & Muhametzyanova, L. (2017). History of Accounting
Development. Journal of History Culture and Art Research, 6(4), 1227-1236.
doi:http://dx.doi.org/10.7596/taksad.v6i4.1163
History of Accounting Development
Rinaz Z. Mukhametzyanov 1, Fatih Sh. Nugaev 2
Lyaisan Z. Muhametzyanova 3
Abstract
Everyone is well aware that accounting is one of the most important areas of economy, which
has become so widespread in our lives today that it is impossible to imagine modern business
and economy without this component. Accounting is a well thought out system that reflects
the movement of various facts of economic life, no matter how different they are, and leads
them into a common logical system. We can talk a lot about the features and possibilities of
this science, but how often do we think about the ways this system arose, the ways of its
development and becoming a separate science? During the study of this problem, an attempt
was made to systematize various points of view regarding the origin and the development of
accounting. After the result of the analysis, the authors identified regularities in the
development of accounting and its methodical apparatus associated with the periodization of
history on technological structures.
Keywords: History of accounting development, Sources of accounting, Accounting, Techno-
economic paradigm.
1
Kazan Federal University, Institute of Management, Economics and Finance. E-mail: rinaz-
[email protected]
2
Kazan Federal University, Institute of Management, Economics and Finance.
3
Financial University under the Government of the Russian Federation.
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Introduction
The history of any science is studied in order to ensure the continuity in its development so
that it could be possible to know the laws of this development so as not to make the same
discoveries twice. For the same reasons, we also study the history of accounting. The study of
this science should be approached from the point of view of the way this phenomenon in
history arose, what important stages in its development it passed, and to see what this
phenomenon has become now from the point of view of its development (Paliy & Sokolov,
1984: 250).
There is no unequivocal answer to the question, when the bookkeeping was born in the book
"History of accounting development" by Ya. V. Sokolov, usually you can hear three answers
(2004: 12):
- 6 thousand years ago, when people purposefully began to register the facts of economic life;
- 500 years ago, when L. Pacholi's book was published ("The sum of arithmetic, geometry, the
doctrine of proportions and relations") and the comprehension of accounting began;
- 100 years ago, when the first theoretical structures appeared in the field of accounting.
Accounting took a variety of forms, depending on the development level of production
relations, productive forces, legislation, tradition, etc. (Galagan, 1927: 11). With the
development of tools of labor, the system of economic relations, the information model
reflecting them also became more sophisticated, the methods and the means of information
processing were also improved. Proceeding from this, it can be assumed that at each stage of
development, various prerequisites can be identified for the emergence and the development
of accounting.
A sufficiently large number of studies from domestic and foreign scientists is devoted to the
history of accounting, various philosophical, evolutionary and other approaches are known,
which are very diverse in nature, cause the discussion on this issue.
Materials and methods
The authors analyzed various sources of information, in which the history of accounting
origin and development is disclosed, as the materials for the study. The main base for the
study was textbooks, monographs, candidate and doctoral dissertations, periodical literature
on the topic of research, the scientific articles from journals, including the indexed ones in the
database "Scopus", "Web on Science", etc. They used general scientific methods as a
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scientific tool for the study: analysis and synthesis, induction and deduction, analogy and
comparison.
Results and discussion
As already noted, the accounting took a variety of forms in its development and the
information model that reflects them was improved, and the methods and the means of
information processing were improved over time. Proceeding from this, it can be assumed that
it is possible to single out various prerequisites for the emergence and the development of
accounting at each stage of development:
- the desire of a business manager to know how much and what property is in his estate, how
much he owes to other estates and how much others owe him;
- the imperfection of tools, unsuccessful hunting, climate change from favorable to cold - in
order to survive in such conditions, a person had to calculate the food supply;
- the development of social production, the division of labor and the exchange of its products;
- the distribution of writing and printing, the development of elementary arithmetic;
- the changes in the forms and the sizes of economic transactions, the development of
capitalism, the development of accounting legislation.
In his book, V.T. Chaya notes that accounting appeared during the primitive communal
system. The imperfection of the tools did not always allow us to earn enough livelihoods,
hunting did not always succeed, and climate change from favorable to cold made to starve
occasionally. In order to survive in such conditions, a man had to calculate the food reserve.
Subsequently, the improvement of tools, the development of surpluses and the beginning of
exchange contributed to the development of accounting (Kulikova, 2015: 98).
According to V.E. Kerimov's opinion account arose during the extreme antiquity, when a
person needed to know how many and what exactly means he has for his existence and how
much time he needs to spend to manufacture the necessary tools.
According to Ya.V. Sokolov, the first sources of accounting are hidden from us forever.
However, we can state that accounting did not come immediately. Several conditions were
necessary for the emergence of written records. First of all, economic activity should be
sufficiently large; Secondly, it was necessary to write and develop elementary arithmetic.
Their appearance created the basis for the emergence of written records, and the development
of economic relations contributed to its ubiquitous dissemination (Sokolov, 2004: 23).
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According to V.E. Kerimov's opinion, the first traces of developed accounting systems are
observed in ancient Egypt, where several thousand years ago people kept a record in the
whistles of papyrus (on loose sheets). Babylonia became the birthplace of "card accounting",
which were made of soft and moist clay in the form of plates. Greece was the homeland of the
first counting device - the abacus (Vetoshkina et al, 2016: 5603).
At a certain stage of trade development, the category of people appeared engaged only in
buying and selling of goods. The spread of mathematics and writing contributed to the
emergence of another profession - an accountant.
At this time, the practice distinguished only the accounting by material data carriers. But
regardless of a carrier type the accounting system developed gradually current registration
system, which was imbued with the spirit of accounting naturalism. Its emergence was related
to the need of people to record what was happening in their household. At first it was
necessary to rewrite all the property that was in the household, and the reason for the
emergence of inventory is related to this. But already with the passing of a short time the first
inventors (accountants) noticed that some things have individual characteristics that are easy
to describe and write down, and some are generic ones, which can be written down only with
a single mass, grouped according to a single feature. The desire to group and generalize
certain objects according to genealogical characteristics led to the emergence of conventional
units of measurement ("conventional brick", "man-day"), which became a new step in the
development of the accounting concept, departing from a purely naturalistic approach.
Allocation of generic attributes in its turn led to the invention of accounts, and their use for
the reflection of changes in economic means led to the emergence of simple accounting
(Aletkin, 2014: 35).
Simple accounting allowed to control all the material and cash assets of an enterprise, but it
should be noted that it was of a registration nature only, because it was not possible to
determine the amount of profit, there were no results which allow to monitor the amounts
reflected in the accounting automatically. The development of accounting realism was
facilitated by the emergence of a double bookkeeping, the main feature of which is
represented by the accounts of own funds. From this moment all economic processes were
reflected with the help of a double entry. This, in its turn, made it possible to establish
observation of such quantities as capital and profits that can neither be seen, nor touched, nor
weighed, nor measured, since they were conditional and could be obtained in a purely
accounting way. A serious impetus to the development of a double entry was the introduction
of a single monetary meter, which made different things quantitatively commensurable
(Kulikova, 2015: 252).
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V.T. Chaya divides the development process of accounting technology into three main stages
within a general form: unigraphic, cameral and digraphic one.
The unigraphic record was characteristic of the primitive communal system of the ancient
world (before the 15th century) and was the system of economic activity direct reflection,
only property was considered as its object (for example, precious stones, fabrics, products).
Cameral accounting developed after the XIIth century. Its object was money: their expected
and actual income and expenditure. It should be noted that this type of accounting existed in
parallel with the unigraphic and digraphic accounting.
Digraphic (double) accounting is characterized by the representation of economic operations
by double accounting, the object of which is not only property, but also the sources of its
receipt. This kind of accounting on the territory of Europe was brought by Venetian
merchants, who in its turn acquired the secret of doing business with the help of double
counting from Arabs in the 9th century. This skill was transferred exclusively within the
merchant clans for several centuries. Further, a systematic description of the sequential
processing of information by double counting was suggested by the French monk Luca
Pacioli in the "Treatise on Accounts and Records" (Paliy & Sokolov, 1984).
Another category that authors distinguish a slightly different point of view, which is presented
in Table 1.
Table 1 - Process of accounting development
Period Characteristics
Until 6000 years BC. The emergence of accounting
From 4000 BC. till 500 BC. The naturalistic stage of development
500 BC - 1300 The cost of development
1300-1850 Digraphic stage of development
1850-1900 Theoretical and practical stage of
development
1900-1950 Scientific stage of development
1950 and until our time The current stage of development
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Accounting as a science which has its own theory, the law of double entry of economic
transactions, arose at the end of the Middle Ages. The homeland of double-entry bookkeeping
is considered to be Italy, which is associated with L. Pacioli (Kulikova, 2015: 101).
In his treatise "On Accounts and Records" Luka Pacioli devoted three chapters to the balance.
All these provisions formed the basis of the works by D. Cardano (1539), I. Manzoni (1549),
B. Katruli (1573), L. Flory (1633) and other authors of Italy, J. Impin (1543) in Holland, I.
Gottlieb (1531) in Switzerland and H. Oldcastle (1543) in England. A characteristic feature of
this period was the absence of theoretical generalizations, which were worked out by practice,
as well as the inability of authors to understand the essence of the phenomena occurring in
connection with the processes in a particular state (Sokolov, 2004; Vetoshkina et al., 2016).
During these times, accounting was interpreted in legal and economic sense. For the first time
the legal interpretation of accounting was given by Edmond Degrange (1797), who introduced
the notion of an economic operation and claimed that at least two accounts are required for
each operation: the one who receives, is debited, and an issuer is credited. The principles of
the legal direction were most fully formulated by Francesco Villa (1864), who moved from
personalization instead of an account identification with a person, he entered the accounts for
individuals and interpreted all accounts as open ones for custodian agents, the accounting
subject of which was represented by a contract (Sokolov, 2004: 253).
Together with the legal interpretation of accounting, economic interpretation of accounting
appeared. Giuseppe Forney (1790) argued that the subject of accounting is represented not by
physical and legal persons, subjects of rights and obligations, but by objects, things and
values. All values are measured in money, and this turns them into a comparable and
qualitatively homogeneous property.
Gradually the forms and sizes of economic operations changed and increased, and it was
impossible to capture all these operations using the existing primitive means that the science
of bookkeeping had at its disposal. The end of the XVIIIth and the first half of the XIXth
century is characterized by an intensive development of the productive forces of society, as
well as by the expansion of international trade. The accountant scientists of that time began to
understand that it was not enough to confine themselves to the study and presentation of a
single form alone, and that theoretical justifications of certain practical methods were
necessary, the center of which had to be represented by the factor that is the most important in
the activity of an enterprise, and from this point of view they started to proceed during the
study of a particular private household activity (Kulikova & Gafieva, 2014a: 41).
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The development of capitalism contributed to the further improvement of accounting: since
the mid-19th century they began to reflect artificial values in accounting, such as cost, profit
and depreciation.
The second half of the XIXth - the beginning of the XXth century is characterized by the
stage of accounting development as a science. In most countries the accounting legislation is
being developed during this period, an integral part of which was represented by a balance
sheet and an income statement. During this period the legislation of many countries obliges
entrepreneurs to publish their accounting reports in order to reduce the amount of risk from
shareholders, investors and other external users (Mukhametzyanov & Nugaev, 2016: 48).
The second half of XXth - the beginning of the XXIst century is characterized by an active
implementation of international financial reporting standards, the development of accounting
in conjunction with related sciences. Accounting is becoming one of the most important areas
of the economy, which became widely spread in our lives nowadays (Kulikova & Gafieva,
2014: 40).
Having considered the history of accounting development from various points of view, we
came to the conclusion that it is expedient to single out the patterns associated with the
periodization of history along techno-economic paradigms in the development of accounting
and its methodical apparatus (Table 2).
Table 2. Regularity in the development of accounting and its methodical apparatus,
associated with the periodization of history by techno-economic paradigms
First and second Third techno-economic Fourth Fifth techno- Sixth techno-
techno-economic paradigm techno- economic economic
paradigm (1730- economic paradigm paradigm
(1881-1930)
1880) paradigm (1981-2009) (Since 2010 till
(1931-1980) now)
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- the - mathematical - the method - the - the
methodology of description of of cost development of development
accounting in the accounting procedure accounting normative and the
direction of trade based on the formal by the documents on implementation
and industrial theory of two series of responsibility accounting of International
operation accounts; of centers - the
Accounting and
processing is - the division of
was development
Auditing
being developed; accounting into two
proposed; and
Standards
- the appearance types: financial and - the solution implementation - the use of
of the first analytical and the of strategic of International modern
printed manuals emergence of management Accounting and computer
and textbooks on managerial accounting tasks based Auditing facilities
accounting; principles; on the use of Standards
computers
- for the first time - the appearance of - change in the
and a clear
accounting is professional nature of
division of
mentioned as a accountants; accounts - the
costs on
science - the emergence of
transition from
variables the accounting
computing devices and
proportional of enterprises to
equipment;
to the volume the accounting
- foundations of of production of the entire
accounting science
national
(accounting) are laid;
economy
- the principles of
direct-costing were
formulated
The emergence of accounting as a separate science is associated with the growth of the social
product, the development of industry and the transition from manufactory production to
capitalist production. The concentration of capital led to the growth of labor productivity on
the basis of technological achievements, an explosive growth of production, management and
financial activity led to the further development and emergence of a number of applied
sciences such as management accounting, economic analysis, audit, statistics, management,
marketing, personnel management, etc. (Ushakova & Mukhametzyanov, 2015: 101.
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Conclusion
The results of the conducted study show that the appearance of accounting is hidden from us
forever. The history of this science is studied in order to ensure the continuity in its
development, so that it is possible to know the laws of this development and not to make the
same discoveries twice. Accounting took a variety of forms in its development and over time,
the information model that reflects them was improved, and the methods and the means of
information processing were improved. In this regard, we identified various prerequisites for
the emergence and the development of accounting at each stage of its development.
Considering different points of view on the development of this science, we revealed the
regularity in the development of accounting and its methodical apparatus, connected with the
periodization of history along techno-economic paradigms.
Acknowledgements
The work is performed according to the Russian Government Program of Competitive
Growth of Kazan Federal University.
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