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A potted history of accountancy in the UK

For centuries, the UK has been a big centre of commerce, so it should come as no surprise that, as a nation, we have a long history of accountancy. However, exactly when accountancy first reached these shores is up for debate.

Were the Romans the first accountants in the UK?

What is known is that the Roman army kept meticulous records of supplies, payments and other data. This is because a sample of these records was found at Vindolanda fort, which was located just south of Hadrian’s Wall. They showed that those in charge of the fort were able to calculate how much cash revenue they could generate each day, and knew exactly how much money and supplies they had available.

It is clear that they had a grasp of their finances that is not dissimilar to that of a modern company. Therefore, you could argue that the Romans were amongst the first to keep accurate accounts in the UK. The records that were unearthed dated back to 23AD, which is far earlier than any other financial records that have been found in the UK by archaeologists.

In all likelihood, merchants, owners of large estates and those involved in large-scale commerce also kept some form of accounts. However, relatively little has been written about this, so how this work was done, and by whom, is not clear.

Double entry bookkeeping in the UK

In 1494, Luca Pacioli, from Italy, wrote the first book on double entry bookkeeping. Knowledge of the technique spread fast. In 1553, James Peele, and Englishman, published his book on the subject. This coincided with a boom in commerce that turned Britain into a massive trading nation, so demand for skilled bookkeepers and accountants spread fast.

The first accountancy firms

Many of those early accountants would have deliberately based themselves in big port cities like Liverpool and London because they knew that was where demand would be strongest. In fact, the first record we have of a firm of accountants being set up is of a company that was established in the naval town of Bristol, in 1789.

The formalising of the profession

For many years, processes continued in an informal way with bookkeepers offering their services without any control of how good they were at the job. This began to change after a series of corporate scandals and insolvencies that occurred in the 1840s.

At that stage, the government began to legislate to formalise how companies were set up and wound up if they ran out of funds. This opened the door for accountants to organise themselves, and start to standardise how they worked. In 1872, a group of accountants from London, Liverpool and several other cities came together and founded the Society of Accountants in England.

When Queen Victoria granted a Royal Charter, in 1880, The Institute of Chartered Accountants in England and Wales was founded. Standards of professional conduct were laid out, along with a disciplinary process to enforce these standards. From then on, whether you hired a chartered accountant in Liverpool, London or Manchester, you knew you would be getting someone who would be reliable, and do the job properly.

Posted by Peter
November 30, 2016
Accountants

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