Accountancy is the system of reporting, verifying, and recording the value of liabilities, expenses, assets and income in the books of ledger (account) to which credit and debit entries are posted chronologically to keep a record of changes in value. Lenders, investors, managers, decision makers and tax authorities are the primary people that such financial information will be used. They use this information to make resource allocation decisions within and between organisations, companies and public agencies. The definition of accountancy put forward by the AICPA is " The art of summarizing, recording and classifying money, events and transactions in a significant manner".



One branch of Accounting is Financial Accounting. Historically Financial Accounting has used processes in which business information is classified, interpreted, recorded, communicated and summarized. This is information is usually publically accessible (for public companies).

Accountancy History

The infancy of Accountancy dates back to the Egyptian Old Kingdom and the Sumerians in Mesopotamia (The earliest days of human agriculture). The New Testament of the Christian Bible mentions simple accounting, it is mentioned in the Parable of the Talents (Book of Matthew). Also mentioning simple accounting for credit and trade arrangements is the Quran (of Islam).

Ibn Taymiyyah and Arabic Writer in the twelfth century writer of the book Hisba (Literally, "Calculation" or "Verification") mentions in detail accounting systems that the Muslims used to use in the mid seventh century A.D. The Persian and the Roman civilisations greatly influenced the accounting practices that the Muslims interacted with. One of the most detailed examples that Ibn Taymiyyah provided was a complex governmental accounting systems known as the second Caliph of Islam, the Divan of Umar in which all disbursements and revenues were recorded. Various Islamic historians have described the Divan of Umar in detail and Muslim rulers used this in the Middle East, although with enhancements and modifications until the Ottoman Empire fell.

Modern Accountancy: The Birth

The creator of the "Birth" of Accountancy was a man named Luca Pacioli (he was also known as Friar Luca Dal Borgo). He went down in history as being credited for the "Birth". His Summa on arithmetic, geometry, proportions and proportionality, Venice 1494 (a translation from: Summa de arithmetica, geometrica, proportioni et proportionalita) was a textbook, it was used in northern Italy in abbaco schools, (Abbaco schools were where the sons of craftsmen and merchants were educated). The textbook contained all the mathematical knowledge of his time, in that text the first ever printed description of the methods used to keep accounts was included, this was known as the "double entry" accounting system and at the time was used by Venetian Merchants. Pacioli didn't really invent this system he codified it but to this day he is regarded widely As the "Father of Accounting". Most accounting cycles we know and use today were published by Pacioli, he also described ledgers and journals with his ledger having accounts for liabilities, assets, income, capital and expenses.

The "Big Four auditors", listed alphabetically below, are the largest multinational accountancy firms.

• Deloitte Touche Tohmatsu



• Ernst & Young



• KPMG



• PricewaterhouseCoopers