The History of Accounting Thought That Financial Student Should Understand
Current accounting thought and policy has developed through the years, and every accounting system has developed based on the problems faced in the society at that point of time. There are accounting principles that have developed based on the cultural growth of countries, and there is no research study that has pointed out the clout of one single nation in developing accounting thought.
It is assumed that accounting principles did grow based on the international exchanges of ideas and this helped in developing accountancy.
During the fifth century, the commercial enterprise was having a problem, and this led to the development of a concept of double entry. Industrial revolution bought about more changes to accountancy.
The growth of accounting thought
America has contributed nicely to the growth of Accounting thought and theories throughout the years and the past four decades has shown that accounting thoughts have grown.
Accounting thought process has been considered as an evolutionary process during the 1930s when the companies were looking for industrial revolution globally.
There was a growth of corporations only after World War 1, and this led to the first development of accounting thought. The initial change that happened was the perception change. Earlier accounting was more concerned about giving information to management and creditors only, but the change was that financial information was changed to meet the investment requirement of shareholders and the general public.
The stock market crash in America and depression in America in 1930 led to change to accounting policy. The cost basis and going concern were also recognized, and steps were taken to ensure that there was uniformity of accounting thoughts globally.
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