The development of financial accounting
As we all known, the system of financial accounting is getting more and more perfect because of the emergency of a great amount of the financial transaction . Generally speaking, the developed speriod of accounting can divide three parts:Ancient Accounting, Contemporary Accounting and Morden Accounting. Accounting gets a better growth with the development of the world and science and technology after we step into the 21th century.
About 1000BC,financial accounting had been created . Accounting, as a way to record expenses and receipts,has exsited for a long time . In the ancient time, most of the people can ...view middle of the document...
We can see that the share is balanced at the end of the year instead of every adventure activities . From this , the concept about continuous operation and accounting period appeared.Meanwhile, stock company emerged.
At the same time, there are many events happening all over the world to promote the changing of the capitalism economy.Such as ,the early Bourgeois Revolution(including the British Revolution , French Revolution and American Revolution) and movement of enlightenment originated in France in the second half of the 18th century , which spread the free minds from prejudice , unexamined authority and oppression by church or state.
1.3The British Industrial Revolution
Besides, a great amount of asset through a series of Colonial Expansion activities done by East India Company has been accumulste. It provide a chance to advance The British Revoluton. During this time ,a big amount of production was produced,which leads the concept about depreciation tends to be important.Due to overall scale of the enterprise was expanding and transaction activities is more and more complex ,which makes the information needed about cost of production increasing, and then, cost accounting borned. At the same time, the great amount of capital cause owernership-management separation. If we assume the cost accounting is a new-borned baby,so the Industrial Revolution and stock company is its parents.
1.4South Sea Co Bubble Events
In the past, the main method is accounting keeping and balancing. But now, we need to audit. South Sea Co Bubble Events caused a sensation because of undetailed recording, and it exsited fraud masquerades seriously.So the curtain of audit is lift.
2.1 1929-1933 Economical Crisis
When we step into the 20th ,the era of industrial era of
Industrial Economy was transiting to the Morden Accounting.
At about 1929,the most of developed country broke out
Economy Crisis. Many companies could not pay for the huge debt because they sold shares holded on the securities market.The leader of the government and the public thought the main reason to make the capitalism market desolate even to break down is loosing accounting practice . Thus, most of shareholders required strongly that it is necessary to let accounting report to reflect the true situation of the company clearly. So, 《Securities Acts》was pulished by American government and it draw up a series of the rule of law.
Whatever 《The Securities Act》 or 《The Securities and Exchange Act》,mentioned that it is very important to strengthen the controlling about the accounting information . All of the quoted company had to provide accurate accounting information similarly unified . Under this situation, the Parliament established SEC and require it to formulate consolidate the rules of accounting. Investors who purchase securities and suffer losses have important recovery rights if they can prove that there was incomplete or...