A lot of people that history calls ‘accountants’ were really auditors, stewards and bookkeepers in ancient societies. Even though we have identified examples of double-entry accounting going back nearly a thousand years, as a profession, accountants have only existed since the nineteenth century.
Earlier number crunchers toiling away with their quill pens by lamplight in drafty monasteries and castles usually plied their skills to keep track of a wealthy employer’s inventories and funds. They mostly lacked formal training and many combined their roles with other duties such as serving as scribes or household secretaries.
When we look for the world’s first true ‘modern’ accountant we find that Scotland is where the first example of a chartered accountant can be found. Unlike his predecessors, this accountant had defined skills and worked independently for several clients. Scotland is also the home of the oldest society of chartered accountants.
Italy is often seen as the place where modern accounting began, and it’s true that during the seventeenth and eighteenth centuries Italy was extremely important in developing accounting methods. But as yet there was no official acknowledgement of the qualifications of those who performed in accounting roles.
The first official recognition for accountants came not from Italy but from England. In 1854 the Society of Accountants in Edinburgh was granted a royal charter by Queen Victoria, thereby making accounting a recognized profession for the first time anywhere in the world.
The Society of Accountants in Glasgow was also granted a royal charter five months afterwards. Here are some excerpts from the petition that the Society of Accountants in Glasgow submitted to Queen Victoria when seeking their charter:
– “That the profession of an Accountant has long existed in Scotland as a distinct profession of great respectability;
– “that originally the number of those practicing it was few but that, for many years back, the number has been rapidly increasing, and the profession in Glasgow now embraces a numerous as well as highly respectable body of persons that the business of an Accountant requires, for the proper prosecution of it, considerable and varied attainments;
– “that it is not confined to the department of the Actuary, which forms indeed only a branch of it, but that, while it comprehends all matters connected with arithmetical calculation, or involving investigation into figures, it also ranges over a much wider field, in which a considerable acquaintance with the general principles of law, and a knowledge in particular of the Law of Scotland, is quite indispensable;
– “that Accountants are frequently employed by Courts of Law to aid those Courts in their investigation of matters of Accounting, which involve, to a greater or less extent, points of law of more or less difficulty; that they act under such remits very much as the Masters in Chancery are understood to act in England, and that it is obvious that to the due performance of a profession such as this a liberal education is essential.”
What these accountants had defined was a distinct and highly qualified profession incorporating a specific body of knowledge and a firm relationship with the law of the land. This is a lot more than just keeping track of a wealthy merchant’s stores.
The first professional society of accounting in the United States was the American Association of Public Accountants (AAPA). It received its charter from the state of New York in 1887.
The first Certified Public Accountant (CPA) law in the U.S. was passed in New York in 1896 and required accountants to pass an examination to become certified. The examination had a little to do with accounting and was mostly focused on “The 3 Rs” – reading, writing and arithmetic.
Interestingly at that time there were no specific educational requirements to become a CPA since most accountants received their training through an apprenticeship and not by formal education.
By 1912 thirty-three American states had CPA laws and by 1921 all 48 states had passed them.
This article was originally published in the February 2004 edition of ONEderings ezine.
Article courtesy of RAN ONE: http://www.ranone.com/features/news.asp?ID=3954