Can world economy function well without Accounting? Well we all know the answer is no. The science of accounting in very essential for the world economy to run. There will be no way to understand the financial picture of a company without an accurate way to keep track of investments, expenditures, depreciation and more. Lack of accounting will kill commerce, capital investment and other transactions that keep the economy running.
More fundamental is the question, why should we care about the history of accounting at all? Well the history is more fascinating than many people probably imagine. One of the most important and least well known man in the history of accounting is Luca Pacioli, a Franciscan friar who lived during the fifteenth and sixteenth centuries, who changed the idea how world worked then and it is continue to affect the modern daily life of all living being.
His name looms largest in early accounting history. In 1494, his first book on double-entry accounting was published which is used by Venetian merchants in his Summa de Arithmetica, Geometria, Proportioni et Proportionalita. The Summa was one of the first books published on the Gutenberg press, became an instant success and was translated into German, Russian, Dutch, and English. The Summa made Pacioli a celebrity and insured him a place in history, as “The Father of Accounting.” Until 16th century this section on accounting served as the world’s only accounting textbook. It was Pacioli who was the first to describe the system of debits and credits in journals and ledgers that is still the basis of today’s accounting systems.
It may sound all uninteresting but let’s accept the fact without double-entry bookkeeping the industrial revolution and growth of free-market capitalism could never have happened. The economy as we know it today could not exist without the work of Pacioli in the fifteenth and sixteenth centuries. For understanding Western history and the way in which the economy functions today it is very important to understand his role in accounting history.