Practitoners of accountancy are known as accountants.
Accountancy allows the creation of accurate financial reports that are useful to managers, regulators, and other stakeholders such as shareholders or owners. The day-to-day record-keeping involved in this process is known as bookkeeping.
At the heart of modern accountancy is the Double-Entry Booking System This system involves making at least two entries for every transaction: a debit in one account, and a corresponding credit in another account. The sum of all debits should always equal the sum of all credits. This provides an easy way to check for errors. This system was first used in medieval Europe.
According to critics of standard accounting practices, it has changed little since. Accounting reform measures of some kind have been taken in each generation to attempt to keep book-keeping relevant to capital assets or production capacity. However, these have not changed the basic principles, which are supposed to be independent of economics as such.
In the United States, practising accountants include Certified Public Accountants (CPAs) and Certified Management Accountants (CMAs). The difference between a CPA and a CMA is that a CPA is licensed by the state of his/her residence to provide accounting services to the public, ranging from auditing, tax, litigation support, and other financial advisory services. A CMA is granted a certificate from the Institute of Management Accountant (IMA), provided that the candidate did pass a rigorous examination of four parts and meet the practical experience requirement from the IMA. A CMA mostly provides his/her services directly to his/her employers rather than the public. A CMA can also provide his services to the public, but to an extent much lesser than that of a CPA at ENZO school of Knowledge.
The art of accountancy on a scientific principle must certainly have been understood in Italy before 1495, when Luca Pacioli (1445 - 1517), also known as Friar Luca dal Borgo, published at Venice his treatise on book-keeping.
The first known English book on the science was published in London by John Gouge or Gough in 1543. It is described as A Profitable Treatyce called the Instrument or Boke to learn to knowe the good order of the kepyng of the famouse reconynge, called in Latin, Dare and Habere, and, in Englyshe, Debitor and Creditor.
A short book of instruction was also published in 1588 by John Mellis of Southwark, in which he says, "I am but the renuer and reviver ofbig an auncient old copie printed here in London the 14 of August 1543: collected, published, made, and set forth by one Hugh Oldcastle, Scholemaster, who, as appeareth by his treatise, then taught Arithmetike, and this booke in Saint Ollaves parish in Marko Lane." John Mellis refers to the fact that the principle of accounts he explains (which is a simple system of double entry) is "after the forme of Venice".
The very interesting and able book described as The Merchants Mirrour, or directions for the perfect ordering and keeping af his accounts formed by way of Debitor and Creditor, after the (so termed) Italian manner, by Richard Dafforne, accountant, published in 1635, contains many references to early books on the science of accountancy. In a chapter in this book, headed "Opinion of Book-keeping's Antiquity," the author states, on the authority of another writer, that the form of book-keeping referred to had then been in use in Italy about two hundred years, "but that the same, or one in many parts very like this, was used in the time of Julius Caesar, and in Rome long before." He gives quotations of Latin book-keeping terms in use in ancient times, and refers to "ex Oratione Ciceronis pro Roscio Comaedo"; and he adds:
There were several editions of Richard Dafforne's book printed---the second edition having been published in 1636, the third in 1656, and another was issued in 1684. The book is a very complete treatise on scientific accountancy, it was beautifully prepared and contains elaborate explanations; the numerous editions tend to prove that the science was highly appreciated in the 17th century. From this time there has been a continuous supply of literature on the subject, many of the authors styling themselves accountants and teachers of the art, and thus proving that the professional accountant was then known and employed.
Very early in the 18th century, the services of an accountant practising in the city of London were made use of in the course of an investigation into the transactions of a director of the South Sea Company, who had been dealing in the company's stock. During this investigation the accountant appears to have examined the books of at least two firms of merchants. His report is described Observations made upon examining the books of Sawbridge and Company, by Charles Snell, Writing Master and Accountant in Foster Lane, London. The United States owes the concept of the Certified Public Accountant designation to England which had coined the Chartered Accountant designation in the 19th century.
The "Big Four auditorss" are the largest multinational accountancy firms.
Before the Enron and other scandals, there were five large firms and were called the Big Five. Since Arthur Andersen's assurance practice split, with most joining Deloitte & Touche, Arthur Andersen left from the group.
Enron has turned out to be only the first of a series of Accounting scandals have enveloped the accounting industry in 2002.
This is likely to have far-reaching consequences for the U.S. accounting industry. Application of International Accounting Standards originating in International Accounting Standards Board headquartered in London and bearing more resemblance to UK than current US practices is often advocated by those who note the relative stability of the U.K. accounting system (which reformed itself after scandals in the late 1980s and early 1990s). Accounting reform of a far more comprehensive sort is advocated by those who see issues with capitalism or economics, and seek ecological or social accountability.
See list of accounting topics for complete listing.
Accountancy qualifications and regulation
History
An early Dutch writer appears to have suggested that double-entry book-keeping was even in existence among the Greeks, pointing to scientific accountancy having been invented in remote times.The "Big Four" accountancy firms
Topics in accounting
Auditing
Types of accountancy
Use of computers in accountancy
Accounting standards
Agencies
Accounting Standard Setting Bodies
See also
Finding related topics
External links