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Sunday, August 9, 2009

Accounting History

In the past years, the accounting is only related to recording system for banking services and tax collection. Due to commercial revolution, accounting is developed into modern double-entry booking system to serve the information needs of trading companies. The Accounting system of this age is to reveal continuing change to adapt to the economic changes. Similarly due to the industrialization and division of labor, the need of managerial accounting and cost behavior analysis is emerges. The rise of the modern corporations during the industrial revolution, with funding provided by outside owners, led to the development of periodic financial reporting.

Accounting reflects the cultural, economic, legal, social and political conditions of the environment within which it operates. Accounting practices and procedures can be better understood by knowing the underlying factors that influence their development factors helps to explain the observable difference and similarities. Because accounting responds to its environment, accounting research reveals that different cultural, economic, legal and political environments produce different accounting systems, and similar environments produce similar systems.

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