Conceptual framework and Historical Background of Accounting

Conceptual framework and Historical Background of Accounting

There is no accurate record as to when accounts started, but available information suggests that record keeping is as old as man. The starting point can be linked to the merchants in the Babylonian and Assyrian civilizations, about 4000 year B C. the mode operandi for keeping records then was to make mark on the wall or stone or papyrus or wax tablets. The method of keeping financial record was highly primitive. Accounting is also motivated in the Christian Bible (Matthew 25:19) in the parable of the talents.The history of accounting is not complete without mentioning the name of an Italian monk and Mathematician LUCCA PACIOLO. In 1494, the crucial event in accounting was the introduction of double entry book system in Italy described as “Italian Method”. In his famous treatise Summa De. Arithmetical Geometrical Proportion etproportionalita in 1994 in Venice.Reverend father Lucca Paciolo by giving insight into the reasoning behind accounting records. He postulated that all entries must have a double- entry one a debtor, and one a creditor. Even though during this period the records were prepared to show statement for the business rather than the owner, but the yearly preparation was still lacking.

After Paciolo, a Dutchman advocated the profit and loss account at yearly interval. The level of civilization and technological advancement helped in the development of modern method of accounting.

During the industrial revolution there was need to sophisticated accounting methods. Different professional bodies were formed e.g. ICA Scotland in 1854. ICA England and Wales in 1880, etc. With the development of new methods ownership was separated from management. Since the discovery of the double entry principle, there has been tremendous development in accounting theories and methods. The introduction of micro and mini computers have brought enhanced performance but the fundamental principles remain unchanged.                                                                                                                                                        In Nigeria, record keeping has antecedents in the ancient kingdoms and Empire and prominent then was the periodic contributions which were recorded on the wall. But the granting of royal character to Royal Niger Company was the turning point period in record keeping. The governing accounting principles in Nigeria as almost the same as the one’s in Britain.

In 1965, the institute of chartered Accountants of Nigeria was established and affiliated with the professional institutes in Britain and USA. Many Nigerians came back as professional accountants and became members. The institute was charged with the responsibilities of regulating accounting procedures and practice in Nigeria.

In 1982, Nigeria Accounting standard Board was established to set standards to guide accounting operations. Members include Accounting Teachers Association, Chamber of Commerce, Central Bank of Nigeria, Finance Ministry of Nigeria, etc. Now in Nigeria/ there are two recognized bodies namely institute of Chartered Accountants of Nigeria (ICAN), Association of National Accountants of Nigeria (ANA)of Nigeria.(Essential accounting textbook for senior secondary school).