It’s easy to think that accountancy has always been around, but, it must have started somewhere which got us thinking so we had a look and this is what we found…
Where it all began
Most historians are in agreement that the first accounting records were found in Mesopotamia thought to be related to temples’ trading activities and taxes.
An example of this is a 5,000 year old tablet that reads “29,086 measures of barley 37 months Kushim”
Coming of age in 1494
An Italian by the name of Luca Pacioli was the first to inscribe the method of double-entry bookkeeping, something that had been developed in the 13th Century and was widely used by Italian merchants.
The 27 pages inscribed by Luca Pacioli took from the Venetian method around at the time and formed the basis for the double-entry bookkeeping that is still practiced in 2018.
The birth of regulation in 1780
A new business venture setup in Bristol in 1780 by Josiah Wade, specialising in auditing merchants’ accounts, would go on to dominate by merging with Deloitte 199 years later who are now the largest firm in the world.
Accountants get institutionalised in 1870
The 1870s were when it all started for ICAEW who received its Royal Charter in 1880 and would go on to publish the first programme by a professional body in the British Empire to give advice on proper accounting practice.
Concealment in 1931
The chairman of the Royal Mail Steam Packet Company, Lord Kylsant, and its auditor, HJ Moreland, were tried for fraud. The case concerned the concealment of transfers from secret reserves into the profit account when in fact the company made heavy losses. Moreland was found not guilty but the chairman was imprisoned for a year. Accountancy bodies recognise the importance of stating true profit and loss accounts but this didn’t become a legal requirement until 1967!
Software revolution begins 1979
A key ingredient behind the success of the Apple II computer in the late 1970s was it’s then ground breaking number crunching package Visicalc,described as “a new way of thinking about the world”, that forever changed how computations were made.
Ultimately the launch of Microsoft Excel in 1985 made spreadsheets available to all and grew to become the most important computer program in workplace around the world.
Global accounting standards in 2001
A vision to create global accounting standards; consistent, common standards that investors could use to make accurate comparisons and judgements.
Although International Financial Reporting Standards (IFRS) have been widely accepted the US are yet to adopt and whilst the ambition remains, the move to globally accepted standards is still some way off.
Birth of the Cloud in 2006
Xero was founded by Rod Drury and his personal accountant when they felt that desktop accounting software had become outdated and decided to create a modern cloud-based product. Xero expanded from New-Zealand rapidly and entered the UK market in 2008.
Blow Abbott have adopted Xero as our preferred provider and are excited about the efficiencies the software provides along with the huge app based community it links in with for the benefit of our clients. Check our Xero page on our website.
Credit crunch in 2007
On the 9th August 2007 the credit crunch began. Earlier in the year concerns had begun to grow around the risk associated with US subprime mortgages. The starting gun was sounded by French bank BNP Paribas, it announced they were freezing the assets of three hedge funds exposed to the US subprime mortgage market.
This signalled to investors that they would not be able to remove funds because it could not value the assets in them, destroying the market. The sharp escalation in the cost of credit for all banks lead to the subsequent run on Northern Rock, the demise of Lehman Brothers and the bailout of RBS, Lloyds etc. etc.
Fintech in 2008 (ish)
On the back of the financial crisis, technology led financial services or “FinTech” arrives on the wave of the disruption being caused by technological innovation and changing consumer needs.
Every area of financial services is undergoing disruptive change and the alternative finance market is producing a myriad of new and totally innovative business models. There seems to be no end to the wave of change sweeping through this industry.
Blockchain arrives in 2008 (ish)
Either Dr Kelce Wilson or an anonymous collective called Satoshi Nakamoto invented blockchain.
Bitcoin, a digital currency experiment, came first and is now used by millions of people for payments, including a large and growing remittances market.
It became clear that blockchain, the technology on which bitcoin operates, could be separated and used as an incorruptible digital ledger for economic transactions – for virtually anything of value
Many financial institutions are still understanding its use and power and are testing its ability to streamline business further. Whilst the future development of blockchain is unclear, it’s potential could be far reaching.
The need for speed in 2012
HMRC, like all organisations has had to digitalise its operations and business have felt this so far by way of;
- Auto-Enrolment in pension
- RTI in payroll
The latest development is that of Making Tax Digital, the Government’s plan to shift tax online, trials are ongoing, but steps are being made to prepare for this especially with Blow Abbott. For more information about MTD please download our guide.
That’s it, for now…
It’s clear from the above that change has already been part of accountancy, but, the pace of change if certainly accelerating and there is a lot to consider. If you have any questions about developments within your sector, not just accountancy, we’re happy to talk things through with you and plan ahead.
Thanks for reading