The Beginnings of Accounting and Accounting Thought

This text is divided into two distinct sections. Based on archaeological, historical and accounting research, the first part deals with the emergence of accounting practice. The 10,000 year-oldhistory of accounting is traced back to the Sumerian token accounting and token-envelope accounting (the latter of the 4th millennium BC.). Small clay tokens inside a clay envelope stood for individual assets while the impressions of those tokens on the surface of the envelope represented the totality of the corresponding equity. From this arose (in the 3rd millennium BC.) the crucial innovaton of proto-cuneiform bookkeeping that led to abstract counting and writing on clay tablets. The book also illustrates the astounding sophistication manifested in some of the accounting and budgeting procedures of the time. The second part examines the first known manuscript that contains descriptions of accounting activities: this is Kautilya's "Arthasastra", written about 300 BC in India. A little known work in Western accounting, it contains sections describing various accounting, budgeting and taxation aspects.