Question

What are characteristics of the new view of accounting in 1970's?

Answer 1

Accounting has changed dramatically over the years. From the first IBM computers to the AI-powered tools of the present day, the world of accounting has transformed hand in hand with technological change. So, as Accountancy Age celebrates its fiftieth anniversary, we thought we’d take a whistle-stop tour of the industry milestones over the past 50 years.

1970s – Early computers

The 1970s weren’t all flared trousers and the bright colours, they were shaped by political and economic turbulence, defined by events such as the Watergate Scandal in the States and the Three-Day Week in the UK. But the years weren’t all doom and gloom, especially for accountants, who began to reap the rewards of the first mass-produced microcomputers. 1978 saw the arrival of VisiCalc, short for “visible calculator”, the first spreadsheet software. The Apple II computer’s “killer app”, VisiCalc revolutionised financial modeling and sold over 700,000 copies in six years.

Characteristics of the new view of accounting in 1970's

In the late 1970s, we witnessed major innovations in electronic equipment for accountants. Texas Instruments introduced the TI-58 and TI-59, allowing us to program calculations on a hand-held calculator. The TI-58 sold for $100; the TI-59 sold for $200. I was gooney enough to part with the $100 for the TI-58. At about the same time appeared Tandy’s Z-80 computer, featuring a RAM of 4k for the ~$800 model, and 12k for the ~$1,200 model, utilizing a small casette recorder for storing written programs and data. Of course, you had to write programs in Basic to have the computer process anything at all. Back in the 1970s, many of us were required to take classes in Basic, Fortran, and COBOL in anticipation of the emergence of computer processing in the small business environment. Needless to say, that was a waste of time and money.

As a period of political turbulence, it also marked the beginning of fundamental change in the accountancy profession. The 1970s accountant was rather like the actuary of today. It was a profession unused to public scrutiny, confident in its own beliefs and practices, which had gradually drifted out of touch with a changing public mood.

Following a series of mishaps, it found that the public’s perception of the profession and what it should do, was far removed from the image it had of itself and what it thought its purpose was.

Like actuaries today, accountants were summoned to the Treasury and told in no uncertain terms to clean up their act. Their struggle to begin the process of change was the defining issue of my period as editor. But while that was the way the tide was flowing, it was often hard to see because of the squalls, of which the biggest was inflation accounting.