The history of accounting can be traced back to the ancient civilizations of Mesopotamia, Egypt and Babylon and corresponds to the very rise of empires, the development of forms of writing and early inventions.
In India the influential 2nd century BCE Sanskrit text, the Arthashasthra authored by Kautilya, also known as Chanakya on aspects of statecraft included not just treatise on economics, law and military strategy but in addition contained detailed notes on the importance of maintaining accounts for a Sovereign State. The text included accounting principles, bookkeeping standards and methodology, the role and responsibilities of accountants and of course of auditors and the detection of fraud.
States, merchants, traders, householders had long maintained accounting information but it was in the late 15th century that the Venetian Luca Pacioli, regarded as the father of accounting and bookkeeping in his publication ‘Summa de Arithmetica, Geometria, Proportioni et Proportionalita’first enunciated the system of double-entry bookkeeping that with adaptations, continues in use till today. Simplistically explained, the double-entry system of bookkeeping balances two corresponding and opposite entries, assets and credits with liabilities and debits.
In India like elsewhere in the world much has changed with handwritten accounts, moving on to the typewritten and now on to modern professional accounting on computers. But one bookkeeping system continues unaltered over the centuries and that is the use of the double-entry system maintained in ...