Special Supplement

Happy International Accounting Day 2021 !

Published : 09 Nov 2021 08:28 PM

International Accounting Day or International Accountant’s Day is celebrated on November 10. This date of this an unofficial holiday was chosen to honor the “Father of Accounting and Bookkeeping” named Luca Pacioli. "Accounting” refers to organized measurement, systematic processing, and communication of both financial and non-financial data and information about all kinds of economic entities. Bookkeeping is only a part of accounting that includes the keeping or recording of purchases, receipts, sales, payments, and virtually any financial transaction.

The history of ancient civilizations reveal significant notes on accounting and bookkeeping as their development went hand in hand with the introduction and development of activities like counting, writing, trade, and monetary practices. Bookkeeping in its earlier forms was practiced by ancient Iranians and Mesopotamians, and the early forms of auditing systems were adopted by ancient Egyptians and Babylonians.

With complete adherence to the primary procedures and principles from the Middle Ages, the process of accounting has seen remarkable development in modern times, thereby including several areas such as financial accounting, taxation, management accounting, accounting information systems, and auditing.

Despite the unclear information about its origin, International Accounting Day is celebrated all over the world on November 10. Luca Pacioli's first publication titled Summa de arithmetica, geometria, proportioni et proportionalita or Summary of arithmetic, geometry, proportions and proportionality came out in Venice on this day in 1494. How much does a mathematics book have to do with accounting?

One of the sections of that book named Particularis de computis et scripturis or details of calculation and recording, which brought to light the idea and method of bookkeeping used by the then Venetian merchants. That same process is known as the double-entry system and used with some modifications by today's companies and organizations. The double-entry bookkeeping system came into being long before Pacioli's publication, but he is still considered the first human to codify and describe the system.

The explanation of this method of bookkeeping from Pacioli revolutionized the adoption of accounting in the professional circles as businesses could improve their profitability and efficiency in finances. The particular section of Pacioli's book was later introduced as the primary textbook of accounting by many countries for decades. This widespread adoption established Pacioli as the "Father of Accounting or Founder of Bookkeeping". International Accounting Day has thus been chosen as an occasion to recognize Pacioli's role in the formulation and development of the accounting system used today.

The need for an accountant being felt by almost every company or organization makes accounting one of the indispensable professions. International Accounting Day has been a great occasion to create awareness among individuals about the role of accounting and to celebrate the work of people who are busy keeping the finances of the world in order. Many companies and organizations offer congratulations and gifts to their accountants on this occasion though it is not an official day.

Working with numbers and keeping ledger books is not a job for everyone although our schools, banks, government, and jobs would not be able to run properly without the decisions that accountants help us make. November 10 is the day when we can celebrate these diligent financial professionals whose contributions should be acknowledged and remembered.

Since a company or business needs to access its financial records to operate efficiently, an accountant's job involves more complexities than we may think of. Conventional duties of an accountant include analyzing financial data, keeping records, preparing reports, helping with budgetary preparation, filing tax returns, and many other things. A typical financial report prepared for a business includes its current and future financial statuses and insights. These professionals also provide businesses with recommendations for achieving financial stability and benefitting from tax incentives. Accounting data curation is the most critical responsibility that an accountant undertakes. They assess and define a company's overall financial condition and help the decision makers do their job in the best possible manner. Decision-making, if it has to be timely and effective, requires proper management of money, time, and resources which an accountant can help with.

Accounting has been being practiced for several millennia. Records from 5000 B.C. reveal that Mesopotamians used accounting as a tool to track their daily exchanges of goods between various temples. Significant discoveries include records of commodity distribution, private expenditures, and other activities which are associated with the ancient Babylonia, the Roman Empire, and Egyptians. After its introduction during pre-modern times, this field has seen serious development. Being linked closely to cloud computing and data management, accounting has been integrated with advanced IT platforms like Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM), all leading to its being the language of every business in modern times.

While all people are not born accountants, the real ones really love their jobs as they drop numbers into ledgers or spreadsheets, add or subtract them to make them balances. They feel enjoyment using their calculators properly although not all can understand the true pleasure.

However, everyone involved in some kind of legit business should know how to manage transactions, read balance sheets and income statements, and manage the flow of cash. All these activities are part of accounting. So, we can try to thank every accountant we know. We can think of the use of accounting in a way that makes lives better, businesses profitable, and decisions more appropriate.

Despite all these considerable facts about accountants, many people among our acquaintances, colleagues, and friends are still unaware of International Accounting Day and the date when it is observed. Social media, online campaigns, and other forms of advertisements can be used to make them aware of the day and its significance. Even a simple Facebook status from someone outside this field of profession saying "Happy International Accounting Day" can make the hardworking professionals feel appreciated, remembered, and respected. Such incentives can help them in their quest to be more insightful, knowledgeable, and resourceful.

Accountants in different organizations can motivate each other to commit to further development and innovation in the field in order for making greater contribution to the society as well as the country. International Accounting Day brings us an opportunity to pay tribute to the famous Luca Pacioli and remember his timeless remark, "A person should not go to sleep at night until the debits equal the credits". It is simply astonishing to imagine how many nights some of the accountants around us have to go without sleep just to keep our business on track!"

Md. Touhidul Alam Khan is Additional Managing Diector of Standard Bank Limited. He is fellow member of Institute of Cost & Management Accountants of Bangladesh (ICMAB) and first certified sustainability reporting assurer (CSRA) in Bangladesh. He can be contacted: [email protected]