Revisiting the Role of Accounting from Ancient to Contemporary Times: An Attempt to Evaluate the Role of Corporate Accounting

Abstract

The needs for economic systems that humans constructed throughout time have been the driving force for accounting technological inventions starting with bookkeeping, followed by double-entry bookkeeping. Many civilizations and societies have contributed to the development and advancements of accounting. To this effect, Italy was a fortune county in which the number of "antecedents" converged, and thus, is considered the place of origin for modern accounting. Italy as a society cannot be held solely responsible for its birth, nor can its citizens be credited for the invention of accounting. Attributing the creation of accounting to Pacioli and the dating of its origin to 1449 require further consideration, rendering the questions of who invented accounting and when wide open. In the absence of hard evidence, speculating such a defining moment is the optimal contemporary accounting research produces. Accounting has retained its usefulness in societies through its adaptability to new roles when the master of the business is present. The business model needs to be revisited and retheorized when accounting is not serving well. A social paradox results from financing the operations of corporations and becoming their victims. Accounting cannot compensate for owners' absence in the business model selected for conducting business. Accounting research inquiring about the role of accounting and questioning its usability and benefit to society labeled 'critical' or 'historical' or deeming such discourse radical should be one of the mainstream accounting research instead.

Accounting as a sustainable crafted technology for human exchange activities with nature: A defense of accounting continuity

“…Humankind designed accounting systems using tokens to control society's resources before discovering writing (Mattessich, 1989;. Double-entry bookkeeping is an innovative technology in human history that meets the needs that the principal-agent relationship has generated (Al-Adeem, 2022a;Hendriksen & Breda, 2001;Littleton, 1966Littleton, /1981Yamey, 1947), namely, to safeguard resources and hold agents, who are trusted to administer and invest such resources, accountable. Double-entry bookkeeping rationalizes capitalist production methods (Carruthers & Espeland, 1991).…”

“…Centuries before Luka Paciolo documented the recording practices of traders in Italy, 1 the double-entry bookkeeping method already captured the duality in the exchange among traders (Al-Adeem, 2022a;Belkaoui, 2004;MacNeal, 1939;Matter et al, 1996;Yamey, 1947). This practice was known at least 200 years before he published his book (Belkaoui, 2004) and has been traced to 1,304 (Baskin & Miranti, 1997: 33).…”

“…Undoubtedly, accounting is one of the best anthropological developments (Chambers, 1984) and the most trusted profession in the world (Moehrle et al, 2006, xxii, p. 6). Accounting has emerged in response to society's needs (Al-Adeem, 2017;2020a;2020b;2022a;Al-Adeem & Fogarty, 2010;Al-Hazzani & Al-Adeem, 2020;Anderson, 1977;Belkaoui, 1995;Boedker & Chua, 2013;Burchell et al, 1980;Chambers, 1960;1984;Chatfield, 1977;Cowan, 1968;DR Scott, 1926;Hatfield, 1924;Hopwood, 1987;Lehman, 2005;Littleton, 1966Littleton, /1981Merino, 1993; Montgomery as cited in Nelson, 1949;Vatter, 1963;Yamey, 1947). Adapting to new roles (Montgomery in the Foreword to Edward Peragallo's Origin and Evolution of Double Entry Bookkeeping, as cited in Nelson, 1949: 357) is the nature of accounting, and accounting continuity (Littleton & Zimmerman, 1962;Alshirazi, 1990) is assured by the malleable nature of the field.…”

“…Throughout the ancient civilizations, when control for resources was needed, accounting served humankind in keeping records with whatever means were available at that time, such as clay, to account for and provide control over resources (Hackett & Mobley, 1976;Mattessich, 1989;Al-Adeem, 2017;2022a). Advanced accounting systems have long been a cornerstone of nations with sophisticated economic systems (Chatfield, 1977).…”

“…At present, the role of accounting in the corporate model, where professional managers who are not the owners lead corporate entities (Berle & Means, 1932), has been a challenge for the accounting profession (Merino, 1993;Previts & Merino, 1998;Al-Adeem & Fogarty, 2010;Al-Adeem, 2017;Al-Adeem, 2021;2022a;2022b;Al-Hazzani & Al-Adeem, 2020). Accounting theorists, academic accounting organizations, and accounting professional bodies have all worked toward normalizing the content of corporate reports (Al-Adeem, 2019a;Al-Adeem & Fogarty, 2010) the Statement on Accounting Theory and Theory Acceptance (SATTA, 1977).…”