A Chronological Study of the Evolution of the Turkish Accounting Profession from the Ottoman Period to the Present

Sudi Apak, Mikail Erol, Masum Türker and Hanifi AyboÄŸa M.â
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Sudi Apak: Department of Industrial Engineering, Faculty of Engineering and Architecture, Ä°stanbul Esenyurt University Istanbul, Turkey
Mikail Erol: School of Applied Sciences, Ä°stanbul Esenyurt University, Istanbul, Turkey
Masum Türker: Former President and Board Member of TURMOB, Turkey
Hanifi AyboÄŸa M.â: Vocational School of Social Sciences, Marmara University Istanbul, Turkey

The International Journal of Accounting (TIJA), 2023, vol. 58, issue 04, 1-31

Abstract: SynopsisThe research problemThis paper aims to reveal the transformations that the Turkish accounting profession has gone through since 1839 when the modernization efforts of the Ottoman Empire started. At this point, the transformation covers the final period of the Ottoman Empire governed by the sultanate (1299–1923), and the Turkish Republic that adopts a democratic governance style (1923–present). Having a static economic structure, the Ottomans tried to gradually adapt to western style governance and practices, and they decided to quit the Stairs method that used to be a state accounting method in the accounting system (750–1879) and transit to the double-entry bookkeeping method (1879). Within the framework of westernization efforts in the republic period, the accounting systems were based on the double-entry bookkeeping method, and they adopted tax-based accounting approaches previously. They moved toward development, professional organization, and international system integration in the process.MotivationThe study aims to present the changes in the Turkish accounting profession in the last 200 years. The Ottomans had governmental and economic changeovers with the Tanzimat Reform.We deemed it to be a basic need to reveal the influences of demolishing a feudal state and founding a new state on the accounting profession and practices, and the developments of the accounting profession in the republic period. This study examines the period between 1879 and 2022 by dividing it into terms on the basis of significant changes in accountancy and the accounting profession.Target PopulationAccountant historians, finance analysts, shareholders of companies engaging in stock exchange deals, finance managers of companies, independent auditors and shareholders.Adopted MethodologyAccounting historians’ documents, score matching analyses for robustness.AnalysesAll documentary analyses are composed to the results in different periods. The development of the accounting profession has been evaluated within economic and political processes. The effect of wars in Turkey and in the world on the accounting profession has been analyzed. The standards required for the merger of the accounting profession with the international practices in Turkish republic period were mentioned. They were analyzed by comparing the international and domestic companies. The international standards are required to evaluate the stock exchange movements of the public companies.FindingsThe trials for Fabrika-i Hümayun factory at the Ottomans in the 1840s showed that the economic structure and the accounting systems must be consistent; otherwise, the accounting, which is the decision support system, would not be utilized well enough. At this point, the need to transit to the double-entry bookkeeping and reporting systems compatible with the capital and profit motivated commercial and industrial operations arose, and the Ottomans quit the accounting method (Stairs) that had been used until that time in 1879, and they transited to the double-entry bookkeeping method. In order to overcome the issues that occurred within this transition process, several different organizations and bodies needed to be established, and a new republic devolved from a demolished state was founded. In the republic period, the changes were embraced by the professional stakeholders, and improved significantly in terms of institutionalization by attaining its legal organization (TÜRMOB). The profession has come a long way in terms of what had been a profession focused on bookkeeping only, having added reporting, professional organization, international cooperation and integration, adaptation to independent audit issues, and global system.

Keywords: Accounting history; double-entry bookkeeping method; expert accounting; TÃœRMOB (search for similar items in EconPapers)
JEL-codes: M4 N13 N14 N15 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1142/S1094406023500129

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