Global Evolution of Accounting Processes

DAVID WARNE By DAVID WARNE, 27th Jul 2018 | Follow this author | RSS Feed | Short URL http://nut.bz/23m1-639/
Posted in Wikinut>Business>Accounting & Finance

Accounting has come a long way since when they were concerned with the black and white of real time figures on ledgers with description of trades made or terms of services rendered.

Global Evolution of Accounting Processes

Accounting has come a long way since when they were concerned with the black and white of real time figures on ledgers with description of trades made or terms of services rendered. Business and commercial enterprises are the crux of an economy and local accountants were much sought after, for keeping a record of how much profit or loss, the business garnered.

History of Book – Keeping: Single entry bookkeeping was the norm, similar to the way we keep track of our finances on an individual basis with all numbers field in a single column.

However, the inefficacy of the above procedure led the book-keepers to evolve something more functional to tally details, when an Italian mathematician and friar, Luca Pacioli cast the die for modern accounting in 15th century. The modern trend of accounting processes which rely on different columns for debit and credit entry made bookkeeping much more scientific and functional and provided a clear picture of how the company fared, at the end of the financial year. Those were the days when accounting was strictly for the eyes and ears of the owners and the public had no access to the financial health or cost-benefit analysis of the company.

Gradual Need for Evolution: The industrial revolution in 19th century was the harbinger for a more professional standard of accounting to come into vogue with increasing clamour of the public in wielding a greater say over the audit and control process of companies, further consolidated by the implementation of series of Company Acts and Bankruptcy Acts. By the late 19th century, Queen Victoria had laid the foundation stone of Chartered Accountants in England and Wales, which hence ensured that a set of exams along with experience shall be pre-requisite to earn the recognised qualification of Chartered Accounts, thus endowing Professional Accounting the much-needed accreditation and recognition.

Accountants are no more relegated to the financial intricacies of Auditing, Taxation, Corporate Finance and Business Advice but taking up more comprehensive role in the management and governance of companies. The practices followed by this critical body allows for the allocation of wealth, distribution of income and operation of capital markets and flow of investments.

Modern-Day Makeover: With the invention of the first commercially available Accounting package on computer, VisiCalc in 1978, for the first time it became possible to crunch data using a micro-computer, giving a huge impetus to the acceptance of personal computers in small and medium business houses.


‘The most landmark change in Accounting processes in the recent years has been the complete shift from standalone accounting packages like ACT and SAGE to Cloud Accounting software where all concerned can access the constantly updated financial records simultaneously allowing people to work from remote locations and log in from different servers, expanding the business and making it more relevant to the times.

Professional Accounting, a key Figure in ensuring Ethical Business Practice:
Traditionally the local accountant who was responsible for tallying the balance sheet of a business has since then come a long way involving operational controls, providing support for strategic and expansion planning and ensuring effective management systems are in place. Professional Accounting, today is critical to ensure sound financial health of a company, in compliance with government taxation and financial legislations and maintaining the reputation and credibility of the company. Accounting, today renders a social redefining of the economy we inhabit by making the choices decipherable to businesses and individuals and making the economy answerable to the society by staying true to the changing times.

Tags

Accountability, Accounting, Accounting Concepts, Accounting Processes, Accounts Payable

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author avatar DAVID WARNE
David Warne is a well-known financial advisor with the abilities to keep a track and predict the market trends with the utmost accuracy. www.getnews360.com

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