The History of Accounting and Bookkeeping

Did you know that accounting has been around for thousands of years and can be traced back to ancient civilizations? That’s right—Abilkisu was sitting inside a stone cubicle in the bullpen of Mesopotamia, balancing ledgers and waiting for the clock to strike five (well, maybe).

The history of accounting is more interesting than you think, with accounting records dating back more than 7,000 years, found inside the ruins of Mesopotamia. Another fun fact: Mesopotamia is a Greek name meaning the land between two rivers, the Tigris and Euphrates—which rise in the mountains of Turkey and flow south to the Gulf where they meet at the Shatt-el-Arab near Basra. The accounting documents found by archeologists show lists of expenditures, and goods received and traded.

Other records have been found in the ruins of ancient Babylon, Assyria and Sumeria, dating back more than 7,000 years as well. The people of that time relied on primitive accounting methods to record the growth of crops and herds. Because there was a natural season to farming and herding, it was easy to count and determine if a surplus had been gained after the crops had been harvested or the young animals weaned.

The history of accounting has grown nonstop, with instances of the practice being found all over the world. Between 4,000 BC and 3,000 BC, the ruling leaders and priests in ancient Iran had people oversee financial matters. In Godin Tepe (گدین تپه) and Tepe Yahya (تپه يحيی), archeologists have found cylindrical tokens that were used for bookkeeping on clay scripts. They were found in buildings that had large rooms for storage of crops. In Godin Tepe’s findings, the scripts only contained tables with figures, while in Tepe Yahya, the scripts also contained graphs (source)! The invention of a form of bookkeeping using clay tokens represented a huge cognitive leap for mankind.

During the thousand years leading up to 0 AD, the expansion of commerce and business gave the ancient accountant more duties. Phoenicians invented a phonetic alphabet “probably for bookkeeping purposes”, and there is evidence people in ancient Egypt held the title “comptroller of the scribes” (heard of a controller, anyone?). There’s also evidence of primitive accounting in the Old Testament—in the Book of Exodus, Moses engages Ithamar to account for the materials that had been contributed towards the building of the tabernacle.

By about the 4th century BC, ancient Egyptians and Babylonians actually had auditing systems for checking movement of goods in and out of storehouses, including oral “audit reports”, resulting in the term “auditor.” As taxes became more important to civilization, it created a need for recording payments. Another fun fact: the Rosetta Stone also includes a description of a tax revolt (source)!

Then there was the Emperor Augustus, who lived from 63 BC to AD 14. The Roman government had access to detailed financial information as evidenced by the Res Gestae Divi Augusti, a Latin inscription which means “The Deeds of the Divine Augustus.” The inscription tells us of the Roman people of the Emperor Augustus’ stewardship. They listed distributions to the people, grants of land or money to army veterans, subsidies to the aerarium (or treasury), building of temples, religious offerings, and expenditures on theatrical shows and gladiatorial games, which covered a period of around forty years.

There’s also the Heroninos Archive, which is the name given to a huge collection of papyrus document—mostly letters, but also including a fair number of accounts—which come from Roman Egypt in 3rd century AD. The bulk of the documents relate to the running of a large, private estate named after Heroninos because he was the “phrontistes” of the estate (the manager). These documents had a complex and standardized system of accounting which was followed by all its local farm managers.

In the 13th century, when medieval Europe moved towards a monetary economy, merchants depended on bookkeeping to oversee multiple simultaneous transactions financed by bank loans. The breakthrough of double-entry bookkeeping occurred at this time (this article by The Huffington Post goes into greater detail). For the layman, this is when there is a debit and credit entry for each transaction. Debit in Latin means “he owes” and credit in Latin means “he trusts” (source).

Accounting as it developed in Renaissance Europe also had moral and religious connotations, recalling the judgment of souls and the audit of sin.

If you’re an accountant, perhaps learning some of this helped give more context to the profession you chose to pursue. Sometimes the monotony of the day-to-day can make you forget the bigger picture, like the fact that you’ve followed in the footsteps of many ancient people, all the way back to ancient Assyria, thousands of years ago. What you’re doing is history in the making!

Clay Harmon writes content for Aplos by day and makes up novel-sized stories by night. When doing neither, his Kindle e-reader is close at hand, or he is drinking coffee and losing at video games on his computer. Raised at the gateway to Yosemite, the occasional trip into the Sierras gives a quick fix for an addiction to mountain air and serves as inspiration for future books cooking in that brain of his.

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