Accounting is considered one of the oldest sciences in the world. The history of accounting began thousands of years before the appearance of Christ, with dynamics that continue to evolve. Even now, accounting remains relevant in various fields because it involves recording financial transactions.
This knowledge is the basis for doing business and other corporate matters. Almost every area related to business will require good record keeping. Those who perform accounting tasks are called accountants.
If you are interested in this science, it is a good idea to study its history and development, both in Indonesia and in the world. Through this article you will obtain complete historical information about accounting.
History of global accounting
Ancient Egypt
The beginning of the practice of accounting dates back to the ancient Egyptian era, around 2920 BC. In that era, Egyptians were already trading between regions. They always simply record transactions. This is where the history of accounting begins.
Financial registration, in the Egyptian style, was done on leaves. Then they kept the papers as evidence. Not only does registration take place between sellers and buyers, but also sales records maintained by the seller.
In that era, the deal was the more traditional version. They do not know the financial system at all except barter. The ancient Egyptians recorded the items they brought with them after trading in Egypt and after sailing.
Knowledge of the history of accounting in this era was initially caused by the discovery of ancient warehouses in Egypt. These warehouses stored the Egyptians’ valuable treasures such as gold, livestock, textiles, and wheat. All of these items are recorded in the bulletin.
Babylonia time
A thousand years after the time of ancient Egypt, it is known that accounting was also known to people who lived in the Babylonian era. This era began in 1894 BC in Mesopotamia, a region located on the Tigris and Euphrates rivers.
In this era, accounting records became more advanced because they were no longer done on leaves but on clay tablets. The Babylonians called them tablets. This tablet can be found with different types of accounting related information.
The information on the clay tablet includes the goods exchanged, the person selling, the person buying, and the time the transaction took place. They also recorded outflows, so they are more recent than ancient Egyptian times.
In addition, the Babylonians also knew the principle of borrowing. Therefore, only purchases and sales are not recorded. On the tablet there is some information such as debtors, creditors, time of payment and also the number and type of goods borrowed.
Ancient China
In this era, the history of accounting is well recorded. The beginning of accounting in ancient China was during the Zhao Dynasty because it was considered more modern and much better than the Babylonian era. It’s just that accounting records nowadays focus on the programs that existed during that dynasty.
Ancient China used very durable papers and many relics can be discovered today. The contents of their accounting records also consist of the sales and profits they receive, whether transactions in their area or when they started sailing at that time.
Ancient Greece
The accounting practices that occurred in the Middle Greek era became the beginning of the history of accounting in Europe. Its transaction records are the oldest on the continent. Transactional content tends to focus on sales and lending. In this era, the term assets became known in accounting.
Central Greece was familiar with accounting starting in the 4th century BC and then grew rapidly. With the increasing development of accounting science, Greece has also become an economically reliable country. That is why this civilization became the most modern at the beginning of AD.
Ancient Roman era
In this era, accounting records became more modern than they were in ancient Greece. Roman civilization already knew the medium of exchange in the form of coins. They no longer barter. The recordings made in Roman accounting history are called Zenon Papyri.
People in Roman times were also aware of the tax system and there were separate accountants who assessed the amount of tax each person had to pay. In practice, they will pay taxes differently depending on the tax laws regulated by the government.
Apart from this, the government in the ancient Roman era also implemented many programs related to economy and finance. This recording in the form of an accounting book was intended to be a form of responsibility and also a tool to reveal economic efficiency of the time.
In this era, people started to learn about better accounting standards. In Zenon Papyri’s book that mentions accounting, there are actually many accounting terms in the form of symbols or abbreviations. Roman cash registers were made meticulously every month.
Modern time
Accounting in the modern era refers to accounting discovered by Luca Pacioli. Pacioli’s book was entitled Summa de Arithmatica. In this book, Pacioli conveys accounting theory. It was a publication on accounting that he wrote in 1494.
Pacioli introduced an elegant accounting system, in which cash flows generated in books were carried out in pairs. Since it is Italian, this book of accounting theory developed very quickly in Italy. Economically, Italy became advanced in Europe at that time.
Then this science was separated from accounting and was called accounting. Although World War II shook the economy in many regions, this science is still developing rapidly. Accounting rules also apply worldwide, not just in certain regions.
There are two systems of global accounting, the Continental System in Europe and the Anglo-Saxon System in the United States. This development makes financial transactions easier. However, the content of the theory remains similar to the content of the rights to own businesses, wealth, losses and profits.
History of Indonesian Accounting
The beginnings of accounting in Indonesia
The beginning of accounting in Indonesia began with the trade route brought by the Dutch via the VOC. This system became known around 1642. It is believed that this time was the beginning of its development and the system used was the continental system.
So far, no concrete evidence has been found that Indonesia began to recognize accounting since the era of the Kingdom. VOC began recording its sales results in the cash book. The Dutch also use several terms in their accounting records.
VOC bankruptcy period
With the bankruptcy of the VOC, the Netherlands experienced economic decline but was replaced by the Kingdom of the Netherlands. At this time, many companies were established, but under Dutch rule. Business practices at that time were more advanced than during the VOC era.
As companies spread throughout the archipelago, the Dutch finally became interested in controlling corporate growth. The Netherlands sent members of NIVA, the Dutch Accounting Institute, to do good and correct bookkeeping.
In the early 1990s, specifically in 1918, Holland established a public accounting firm. This office is the first office in Indonesia. The office name is Frese & Hogeweg. Another office established in Indonesia is HY Voerens.
The effect of independence
After being abandoned by the Dutch, the Indonesian government saw a decline in accounting knowledge. The reason is that there is only one accountant in Indonesia, and he is the professor. doctor. Abutari after independence. This is what made accounting a strange thing at that time.
Then, realizing the importance of good accounting practices for Indonesia’s economic progress, the first Department of Accounting in Indonesia was established in 1952. This department was established at the University of Indonesia, specifically in the Faculty of Economics.
The emergence of the accounting program has been imitated by many other universities in Indonesia since then. The government then issued the 1954 Law No. 34 which refers to the term accounting in economics, i.e. bookkeeping of transactions.
Modern accounting in Indonesia
The development of accounting in Indonesia entered the modern era when an organization called the Indonesian Accountants Association was established for those who work as accountants. This is a new history of accounting in Indonesia. IAI was opened on December 23, 1957.
Initially, Indonesia adopted the continental system brought by Europe. Along with its development, Indonesia changed its system to Anglo-Saxon after the United States. The accountant who has a role in this is Otomo Gosoderdjo.
Otomo Gosoderdjo has been called the father of Indonesian accountants. His achievement in the history of Indonesian accounting was to change the system of bookkeeping and modeling in accounting. Now, accounting in Indonesia is also adopting technology because it is practical and faster.
Technology in accounting
Nowadays, the world of accounting is filled with different technologies that make the process of calculating transactions and other things faster. Previously, bookkeeping was done on paper. Now, bookkeeping is done with the help of software.
Use of software is permitted as long as it meets operational standards and procedures. The application of software technology makes the work of an accountant who has a lot of data easier. Because the bigger the company, the more transactions.
With software and now the arrival of big data, this work can become more complex, but it makes it easier for accountants in terms of bookkeeping. However, this does not mean that the history of accounting has simply been forgotten. In fact, it will increase quality and productivity.
Current accounting developments are also expanding to include the use of the cloud, making the system lighter. The large amount of transaction data is not a problem for the company. Accounting principles have not changed with the impact of software and cloud technology.
The development of accounting in the world has a very long history. This science has simply been used since the time of ancient Egypt, and then continued to develop into later times. Accounting is still applied as before, i.e. recording financial affairs and transactions.
The history of accounting that has occurred in the world and in Indonesia will continue to develop because it helps accountants. Accounting principles apply not only to large companies, but to small companies as well. For this reason, many schools have introduced accounting as a subject.