Accounting and auditing history: Major developments in England and the United States from ancient roots through the mid-twentieth century;

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Accounting and Auditing History: Major Developments in England and the United States from Ancient Roots Through the Mid-Twentieth Century1
Howard Stettler
Professor Emeritus, University of Kansas
Summary
The history of accounting and auditing, as inextricably entwined disciplines concerned with the communication of information about economic events affecting governmental or private entities, is traced from the beginning of recorded history to recent times. Both disciplines have developed as a response to emerging needs of the times, and both have facilitated the development of capital markets that have supplied the tremendous amounts of capital to satisfy the demand that was an outgrowth of the Industrial Revolution. Closely associated with the development of the two disciplines has been the emergence of the accounting profession, playing a key role in more recent times in advancing the state of the art in both professional practice and in the development of accounting and auditing standards.
The following chronological synopsis of major developments in accounting and auditing constitutes the framework for the more extensive treatment the paper gives to the evolution of the two disciplines. The rationale underlying these developments is likewise considered.
Major Developments
Means of communication Writing
Accounting and auditing
Accounts of transactions with others and of trading activity
Accounting for owner equity-double entry
Formation of stock companies and reporting of results to third parties
Chartering of companies with limited liability and subject to specified reporting requirements
Principal Causes
Communal activities
Need for a record of economic goods
Accountability for tribute exacted by ruling authority
Economic benefits of trading activity arising from the development of private property
Measurement of the increase in wealth from trading
Demand for capital to extend trading abroad
Extension of the need for capital accumu­lation
generated by the Industrial Revolution
1 An earlier version of this paper was presented at the Haskins Seminar in conjunction with the Third
International Congress of Accounting Historians in London in 1980.
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