GROUP MEMBER: KARTINA BINTI ABDULLAH NURHAFIZAH BT SAFARUDIN AINUR AMALINA BINTI ZAINUDIN NUR EZATY HUSNA BT ZAINAL

Accounting history is defined as the study of the evolution in accounting thoughts, practices and institutions in response to changes in the environment and social needs. It also considers the effect that this evolution has worked on the environment (Belkoui, 1983).

ROMAN CIVILIZATION
Law requiring taxpayers to prepare statement of their financial position.

CHALDEAN BABYLONLAN,ASSYRIAN,AND SUMERIAN CIVILIZATIONS

- Producers of the first organized gov in the world,some of the oldest written languange,oldest surviving biz records.

SCENARIOS PRESENCE RECORD KEEPING

GRECK CIVILIZATION

EGYPTIAN CIVILIZATION - Scribes formed the pivots on which the whole machinery of treasury and other departnment turned.

Where zenon,manager of great estate of Appolonius,introduced in 256 BC an elaborate system of responsibility accounting

CHINESE CIVILIZATION Gov accounting playing a key and sophisticated role during chinese civilization.

 The presence of bookeeping in the ancient has been attributed to various

factor : - invention of writing - the introduction of Arabic numerals - diffusion of knowledge algebra - presence of inexpensive writing material - the rise of literacy -the existence of standard medium exchange

The first double entry books known to exist are those of Massari of Genoa,dating back from year 1340.This double entry bookeeping preceded Paciolo by some two hundred years.

It also fair to mention that a rudimentary form of double entry accounting existed among the ancient Incas 1577.

LUCA PACIOLIS AND DOUBLE ENTRY BOOKEEPING

IN 1494, he published his book, "Summa de Arithmetica, Geometria, Proportioni et Proportionalit which include two chapter- de computis et Scripturis decribing double entry bookeeping. He did not invent double entry bookeeping ,but described what was being practiced at the time .The purpose bookeeping to give the trader without delay information as to his assets and liabilities . All entries have to be double entries,that is, if you make one creditor,you must make someone debtor He suggest not only was the name of the buyer o seller recorded,as well as description of the goods with its weight,size and term of payment were also shown. He also advise close the books each year and frequent acounting makes for long friendship

1) Sixteenth century

introduction of specific journals for the recording of diiferent type of transaction .Use of specialized subsidiary transaction and types of expenditure. Purpose-keep detail out of the journal and also the ledger to avoid filling them up too quickly.

2)Sixteenth & seventeenth - evolution of the practice of period financial statement,personification of all account and transaction to rationalize debit and credit rules that are applied to I impersonal and abstract account. 3) Seventeenth century - application of the double entry system was extended to other types of organization .
- separate inventory accounts for diiferent types of goods.Example: various good account together with other goods consignment account, good in partnership and voyage account.

4)Seventeenth century

5) Seventeenth century

- beginning with East India Company following industrial revolution ,characterized by neeed for cost accounting and a reliance on concepts of continuity ,periodicity and accrual. - method of treating fixed asset: a) asset carried forward original cost,diiference between revenue payment and receipts ,entered in asset a/c ,being tranfered to profit &loss accout at balance date. b) asset account close at balacing date.diiference between total debit and total credit is carried forward as the account balance. c) asset is revalued,the revised value carried forward in the account and balancing difference is carried to profit and loss account.

6) Eighteenth century

7)Nineteenth century

- depreciating property was accounted for as unsold merchandise.While still not heavily used ,there is e evidence by Sailero in 1915,the existence of depreciation method;straight line,reducing method,sinking fund and annuity method.

8) Nineteenth century

- Cost accounting emerged as a product of the industrial revolution.Before industrial revolution,accounting was mainly record of external relation of one bussiness unit with other business unit,so record determine in market.But,large scale operation ,so use accounting records as administrative control.So,appear cost accounting in manufacturing.

9)Nineteenth century

- development technique of accounting for prepayments and accruals ,allow computation of periodic profit.

10)Nineteenth &twentieth- development of funds statement.

11)Twentieth century

- development accounting method for complex issues , from computation eps, accounting for business computation, accounting for inflation and etc.

DEVELOPMENT OF ACCOUNTING THEORY

PRE-THEORY

PRAGMATIC ACCOUNTING

NORMATIVE ACCOUNTING

POSITIVE ACCOUNTING

DEVELOPMENT OF ACCOUNTING THEORY

Pre-theory
Before the double-entry system was formalized in the 1400s, very little was written about the theory underlying accounting practices.
During the developmental period of the double entry system, the main emphasis was on practice. It was not until 1494 when Pacioli wrote the first book to document the double entry accounting system. r 300 years following Paciolis 1494 treatise, developments in accounting concentrated on refining practice.

Until the 1930s, developments in accounting theory were rather random and ill-defined, evolving as they were needed to justify particular practices. Developments in the 1800s led to the formalization of existing practices in textbooks and teaching methods.

Pragmatic Accounting
The period 1800-1955 is often referred to as the general scientific period. The emphasis was on providing an overall framework to explain why accountants account as they do, that is based upon observation of practice. In 1936 the American Accounting Association (AAA) released A Tentative Statement Of Accounting Principles Affecting Corporate Reports; in 1938 the American Institute of Certified Practicing Accountants (AICPA) made an independent review of accounting principles and released A Statement of Accounitng Principles (authored by Sanders, Hatfiled and Moore) In the same year, the AICPA established the Accounting Procedures Committee, which published a series of accounitng research bulletins Overall this period focused on the existing practical viewpoint of accounting and, as research gained momentum over the period, the theories promulgated to explain practice became more detailed and complex

Normative Accounting

The period 1956-70 is labeled the normative period because is was a period when accounting theorists attempted to established norms for best accounting practice. The normative period was one of significant debate. It degenerated into a battle between competing viewpoints on the ideal approach to measuring and reporting accounting information. However the end result was no clear choice for changing practice to one ideal system of (inflation or price adjusted) accounting, leading to the continued use of the historical cost method. Normative theories are distinguished because they adopt an objective (ideal) stance and the specify the means of achieving the stated objective. The provide prescriptions for what should occur to achieve their stated objective.

The normative period began drawing to an end in the early 1970s, and was replaced by the specific scientific theory period, or the positive era (1970). The two main factors that prompted the demise of the normative period were : I. The unlikelihood of acceptance of any one particular normative theory II. The application of financial economic principles, increased supply of data and testing methods. Henderson, Peirson and Brown outline the two major criticisms of normative theories in the early 1970s : I. Normative theories do not necessarily involve empirical hypothesis testing II. Normative theories are based on value judgement.

Positive theory sought to provide a framework for explaining the practices which were being observed; whether what practicing accountants produced had a decision usefulness objective, whether it filled other roles, and whether it was inferior or superior to proposed alternatives. The objective of positive accounting theory is to explain and predict accounting practices. E.g. bonus plan hypothesis. Watts and Zimmerman consider that positive theory has given order to the apparent confusion associated with the choice of accounting techniques. They argue that positive accounting theory helps predict the reactions of investors in the market to the actions of management and to reported accounting information. The problem with this approach is that wealth maximization became the answer to every question

Recent Development
Both academic and professional interests in theory development have tended to be aligned in the past. In recent times, academic and professional developments in accounting theory have taken somewhat different approaches. Whereas the academic research emphasis remains in the area of capital market, agency theory, and behavioural impacts, the profession has pursued a more normative approach. The profession has sought normative theories to unify accounting practice and make it more homogeneous, whereas academic researchers have sought to better understand the role and impact of different forms of accounting information. The need for a single set of international accounting standards was acknowledge by the accounting profession in Australia with the adoption of IFRS in January 2005. This approach aims to eliminate accounting disclosures and techniques specific to one or a small group of countries which subsequently affects the comparability or integration of information, for multinational and listed corporation.