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From the chapter 11, it is seen that accountant is a detector. Many countries built the financial systems in the early 19th century. In paticular of the Bank of England, it continued to centralize from 1848 to 1862.

In the 19th and early 20th centuries, it was the age of deadliness. Because of the Industrial Revolution, accounting became more complex. It was emerged in motdeng consciousness and had two different opinions.

Though there were lots of reforms in the 19th century, many people fighted and injured in the 1820s and 1830s. After that, government decided to take actions.

After 18th century, Britain still could not balance between income and expenditure. Therfore, Earl Grey hied Dr. John Bowring to figure out the problems. Bowirng had deep knowledge about accounting. In 1831, the Commission on Public Accounts gave Bowring the mission to find out the solusion. Bowring noted the France’s centralized system, which allowed French bureaucrats to have a “unified” account of all the state’s finances. With using this system, France’s governments knew the exact stateof its finances and it also provided security against all fraud.

Of all the advances of the Industrial Revolution, the railroad was the most revolutionary. It changed the financial accounting and government regulation. However, it brought more ways to corruption.

Because of the development of railroad, Europe and America became the center of world industry. However, the problem was that this unprecedented growth needed to be funded by investors. Therefore, there were many massive capital influx.

The enginers and accountants calculated the price of a ticket in relation to theproportional use of the entire rail system. By 1860, it was common to find audit reports from various divisions of railroad companies in share holder reports. With the new demands of railroad management, it came innovation. From Benjamin Franklin, “Time is Money”.

Even with statistics in the railroad’s management, the problem was figuring out how much revenue was needed to pay for operating costs and still make a profit. Herein lay the problem of depreciation. Without a depreciation account statement, investors had no idea of the real costsover time of maintaining a railroad.

As capital poured into railroads, vast profits were made by the robber barons, which had malign effects on public reporting and on government financial management. Many of the financial scandals of the age arose from faulty balance sheets. The authority of a balance sheet could be used as both objective proof and false evidence. Government would have to expand to regulate the gargantuan companies. Also, accountants now stepped up as the official regulators of modern capitalism. Private accountants developed to work asmiddle agents between private companies andthe state.

In 1887, the American Association of Public Accountants and the Interstate Commerce Commission were established to regulate the railroads. In 1831, the British Parliament passed the Bankruptcy Act. In 1844, it passed the Joint Stock Companies Act. By the 1840s, major ac-counting firms appeared across Britain. In 1880, Charles E.Sprague created an “algebra of accounts”, Assets = Liabilities +Proprietorship (A = L + P). At the end of the 1800s, depreciation became central to accounting theory. From the book How to Keep Household Accounts, Americans trained in accounting could stand against themenaces of fraud and ignorance.

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