| The particulars of transaction and financial | | | | management accounting, the specific function of |
| relationships between different parties have been | | | | which is to provide whatever financial information |
| written up in the form of financial records since | | | | may be required by the management of the |
| the dawn of civilisation, examples being Babylonian | | | | enterprise for the purpose of planning and control. |
| clay tablets and records from the Roman and | | | | The influence of electronic data processing (EDP) |
| Greek civilisations. | | | | on accounting has been of paramount importance |
| Our present system of accounting has its origins | | | | in the second half of the 20th century. It should |
| in Renaissance Italy. By the 12th century the | | | | be borne in mind, however, that EDP is purely a |
| bustle and extent of the wide-ranging trading | | | | technology that has produced a dramatic increase |
| activities engaged in by the Italian city-states had | | | | in the speed at which large volumes of data can |
| created the need for an effective system of | | | | be processed. Although it has influenced the |
| financial recording which could accurately | | | | utilisation of accounting information, it nevertheless |
| determine the results of large volumes of | | | | has had no effect upon the theory. The computer |
| transactions involving several parties. | | | | has made accounting information more effective |
| Consequently, the double-entry system of | | | | chiefly in that it is now more complete, easier to |
| bookkeeping, the basis of our modern accounting | | | | understand and more readily available. |
| system, was developed. | | | | These days there are a large number of |
| During the renaissance, this system of accounting | | | | accounting software packages that are available |
| became known throughout Europe; by the 16th | | | | to individuals, small and medium size enterprises |
| century it was standard practise in England, | | | | and large corporations. The type of enterprise and |
| Germany and Holland. The first published | | | | internal operating systems will determine the type |
| description of the double-entry system appeared | | | | and size of accounting package that is used. In |
| in Venice in 1494. Written by Luca Paciolo, it was | | | | order for the enterprise to make investment |
| entitled Summa de Arithmetica Geometria et | | | | decisions, a proper accounting structure must be |
| Proportionalita. | | | | in place. Accounting packages are just a tool to |
| The 18th century saw the emergence of another | | | | interpret the 'language' of the financial world - an |
| factor that exerted considerable influence on the | | | | instrument for transmitting information. Users of |
| development of accounting, namely the Industrial | | | | financial information expect accurate and |
| Revolution. | | | | comprehensive information that cannot be |
| There was a tremendous increase in the nature | | | | provided by general spoken or written language, |
| and scope of manufacturing enterprises, trading | | | | so accounting was developed to satisfy this |
| activities had become far more complicated and | | | | specialised need. By virtue of its nature, |
| extensive and therefore effective methods of | | | | accounting information is historical. Historical trends |
| planning and control were essential. These needs | | | | do, however, serve as valuable guidelines for |
| led to the emergence, out of cost accounting, of | | | | future projections. |