| From the early days of clay tokens to the invention of | | | | made the job of accounting much easier. They led to |
| the abacus, accounting is as old as civilization. It wasn't | | | | fewer mistakes, greater accountability, and sped up |
| until the commercial revolution at the end of the dark | | | | the work of the average bookkeeper or accountant. |
| ages that double-entry bookkeeping came into | | | | The 20th Century Information Revolution |
| existence. (It began in the Venice/Florence area in | | | | While there were subtle changes in the field of |
| Italy.) A hundred years later, Luca Pacioli, a Franciscan | | | | accounting from its early days through the 1970s, the |
| monk, wrote a math book that suggested merchants | | | | job remained virtually the same: paper records of |
| needed three things: sufficient cash or credit, an | | | | columns of numbers. But with the invention of the |
| accounting system, and a good bookkeeper. Today | | | | computer, that all changed. |
| accounting is commonly offered as a major of study. | | | | In 1930, Vannevar Bush, a professor at MIT, built an |
| What do you, as a prospective accounting major, need | | | | electronic differential analyzer. Other inventors such as |
| to know about the field? | | | | Konrad Zuse and Howard Aiken built hybrid binary |
| What is commonly known today as "cost accounting" | | | | arithmetic machines and used electric relays to |
| (defined as "The discipline of estimating, tracking and | | | | calculate sums. Professor Aiken worked with IBM, and |
| controlling product and service costs") didn't start until | | | | in 1942 they built what could be called the first |
| the late 18th century, and was spawned by an unlikely | | | | computer. Over the course of the next fifty years, |
| source-a world famous potter. Josiah Wedgwood | | | | massive computers capable of only simple calculations |
| was a highly successful potter when a depression hit, | | | | went from filling entire rooms to the small desktop |
| and he discovered that not only were his clerks | | | | computer most of us use at home and the office |
| ignoring much needed paperwork, they were also | | | | today. |
| stealing money hand over fist. | | | | Computers allow accountants to use electronic |
| He took the time to examine the books in detail, noting | | | | spreadsheets-eliminating the need for adding machines, |
| inaccuracies and becoming aware of the importance | | | | calculators, and pencils and ledgers in one fell swoop. It |
| of calculating overhead into the costs of his pottery. | | | | became much simpler for accountants to keep track |
| He hired a new clerk and began weekly accounting | | | | of information on a minute-by-minute basis and |
| reviews, and according to historians, the concepts of | | | | completely eliminated most mistakes. This has led to |
| "economies of scale" and "sunk costs" were | | | | greater efficiency and accountability, and has changed |
| discovered. He changed the prices of his pottery to | | | | the face of accounting considerably. |
| reflect the influence of demand, creating both a | | | | New Technology Leads to New Risks |
| high-end line and a lower quality mass market line. | | | | Of course, all this electronic information is prey to |
| Wedgewood's company was one of the few to | | | | sabotage and other forms of destructive action. Fraud |
| survive that depression. | | | | is still possible. But this has led to new areas of |
| It took another fifty years or so for the occupation | | | | accounting work, such as forensic accounting. New |
| now known as "accountants" to come into vogue. In | | | | computer programs help track any attempts to initiate |
| the mid-19th century, a group of clerks in London | | | | fraud. This area of accounting protection and |
| advertised their services as "accomptants." As | | | | investigation will continue to grow and evolve. |
| business regulations increased along with taxes, the | | | | Accounting Technology at Home |
| need for professional number crunchers became clear. | | | | The computer has not only revolutionized business |
| The first accounting firm opened in 1845 in London. | | | | accounting, it's also changed how people keep track of |
| Early Technology | | | | their own money. Banking online, software programs |
| Technology has always played a role in keeping track | | | | that do your taxes, and automatic bill paying have |
| of numbers, and the idea of using machines to solve | | | | dramatically altered how the individual handles their |
| mathematical problems goes back centuries. Leonardo | | | | money. |
| da Vinci actually designed a machine he called the | | | | Most of us are grateful that we no longer have to use |
| "Codex Madrid" that contained thirteen wheels that | | | | an abacus to balance our checkbooks, or clay tokens |
| registered digits. | | | | to figure out the grocery budget. As technology |
| While there were several other attempts to build a | | | | continues to evolve, keeping track of our money will be |
| numbers calculator, but it was Blaise Pascal, a French | | | | easier and easier. Thanks to some early |
| scientist, who invented the early calculator (interestingly | | | | mathematicians and accountants, crunching numbers is |
| enough, he also is credited with inventing the roulette | | | | more accurate, accessible, and error-proof. In the |
| machine and the wrist watch). | | | | future, new innovations will no doubt make our lives |
| In 1885, William Burroughs invented the first working | | | | easier. |
| adding machine. The first batch of machines didn't sell | | | | The first step in any area of study is to review the |
| very well since Mr. Burroughs was the only person | | | | history of the field. Accounting is a career path |
| who could use them, so they were recalled, and the | | | | anticipating strong growth in the coming years. |
| corrective automatic adding machine was invented. | | | | Students majoring in accounting can be assured of |
| Naturally, this model sold much better. | | | | long-term career stability and success. If you have a |
| Adding machines and then later-much later-calculators | | | | head for numbers, consider becoming an accountant. |