Opportunities and Challenges in Accounting
BY HOMER E. SAYAD Partner, Saint Louis Office
Presented before the graduating class of the School of Business and Public Administration, University of Missouri, Columbia — April 1960
IN THE complex economic world in which we live today, accounting is an essential tool for recording, analyzing, and interpreting economic and financial data. Management relies on accounting to control and profitably operate its business. Banks and lending institutions rely on accounting, and one of its products, financial reports, in their daily business of granting credit. The government uses and relies on accounting in its dual role of custodian of public funds and as assessor and collector of taxes.
Before proceeding further in outlining the role of accounting in today's economy, and the opportunities offered to accounting graduates, it may be well to review briefly the developments of the past century or so which advanced accounting to its present status.
Accounting, while used in some form or other ever since prehistoric
times, achieved its present eminence during the past century.
The medieval merchant or artisan was, in a sense, using accounting
when he listed his assets—probably without giving too much thought to method of valuation—and recorded his debts. The Italians of the fifteenth century are credited with the theory of double-entry bookkeeping. However, it was not until the nineteenth century that our advanced accounting theories began to be developed and applied to business transactions.
The industrial revolution gave modern accounting its footing and started it on the path that has led it to a prominent place among the professions of this century. A stream of scientific and mechanical inventions ushered in the industrial revolution. The need for the large sums of capital required to develop and exploit these inventions and to produce and distribute their products gave birth to the concept of the "limited company." The limited company
had as its concomitant the concept of stewardship—the managerial
concept. This called for periodic accounting by the managers— the stewards—to the shareholders. The role of the present-day accountant
was thus created.