Prof.Dr.Oktay GÜVEML‹
Batuhan GÜVEML‹
DEVELOPMENT OF
ACCOUNTING
THOUGHT FROM
THE OTTOMAN
EMPIRE TO THE
TURKISH REPUBLIC
Prof. Dr. Oktay GÜVEML‹
Marmara University Retired Professor
Batuhan GÜVEML‹
Marmara University Ph.D. Student
Abstract
Intensive accounting education and increasing numbers of publications
on accounting at the end of the 19th century, built the origins of
contemporary accounting thought before the establishment of The Turkish
Republic.
The reforms made during 1925-1930 affected the modernization of
accounting thought directly and indirectly. Some of these reforms were:
Commercial Code, Income Tax Code and Code on Adoption and Use of the
Turkish alphabet. As a result of the positive effects of reforms of The Turkish
Republic, Turkish accounting thought has advanced considerably during the
20th century.
Key words: The double-entry accounting system, Ottoman accounting
thought, Influence of Reforms of The Turkish Republic on accounting
thought.
42
1. Accounting Thought in
The Ottoman Empire
during the 19th Century
In keeping the records of the
State, all of the State departments of
The Ottoman Empire used the ladder
method as an accounting method;
this system had been used for
centuries. The first use of this State
accounting method was seen in the
Abbasid Empire (750-1258), an
Arab-Islam State. Following the
Abbasids,
the
method
was
developed by the Ilhanians (12501340) and matured during The
Ottoman Empire (1299-1922). As a
result of the dominance of public
economics in this part of the world,
this accounting method was used for
keeping the records of State
incomes and expenditures as well as
for the records of foundations and
similar organizations. There were not
many examples regarding the use of
this method in the private sector
because, due to the dominance of
public economics, there were not
many private companies in The
Ottoman Empire. Small-sized private
firms were using simple accounting
methods for their records. On the
other hand, large private firms were
in the hands of foreign capital
control. The records these firms
were keeping were in the native
language of the companies’
founders and were using the
accounting methods which were
being used in those native countries.
As long as these firms paid their
taxes regularly and obeyed the
internal laws of The Ottoman
Empire, the State never interfered in
these firms. In this kind of an
environment, it was possible to
observe the development of State
accountancy only.
In the aftermath of Tanzimat (an
Ottoman Turkish word meaning
‘reorganization’), a rapid westernization
movement occurred. The financial
structure of the State became part
of this movement. First of all, today’s
Ministry of Finance was established
with the name of Umur-› Maliye in
1838. In this way Basdeftardarlik,
which had served for financial issues
for centuries, was removed. In the
second half of the 19th century
accounting course books concerning
the double-entry accounting system
began to be translated into Ottoman
Turkish and schools giving courses
on accounting were established. The
books
for
the
double-entry
accounting system courses were
mostly translated from French.
Suleyman Asaf’s Muhtasar Usul-i
Defteri 1 (Method of Book Keeping),
published in 1882, and Ahmed
Ziyaceddin’s Fenni Defteri (Scientific
Book Keeping) 2, published for the
courses given at Mekteb-i Rusdiye-i
Askeriye (Military High School), are
examples of these books.
1 Suleyman Asaf: Muhtasar Usul-i Defteri, 1882, Istanbul (Istanbul University Library).
2 Ahmed Ziyaeddin: Fenni Defteri, 1892, Istanbul (Istanbul University Ancient Books Library,
No: 79431).
43
Suleyman Asaf wrote in his
foreword: My purpose in writing this
book is to enable students to learn
the double-entry accounting system
in a simple way. These words
revealed that the ladder method had
come to its end and that The
Ottoman Empire was ready to adopt
the double-entry accounting system.
It is certain that these two books
were not the only examples
concerning
the
double-entry
accounting system; there were also
other books published towards the
end of the 19th century.
It is a fact that during this period,
one after another, contemporary
management schools were established.
One of these schools was established
in Istanbul in 1857. The Mekteb-i
Mülkiye eventually became The
Faculty of Political Science of Ankara
University.3 The main purpose in
establishing this school was to
produce graduates who were
eligible to work as financial officials.
Another school was established in
Istanbul in 1883 under the name of
Hamidiye Ticaret Mektebi.4 It was
the first graduate school established
for the purpose of producing
graduates who were eligible to work
as office workers or become
entrepreneurs in the private sector.
3
4
5
6
It is a fact that this school was
established in a public economics
dominated system, so founding this
school was not an easy task. The
extent of this difficulty can be
understood by looking back to the
past. It was attempted to establish
this school for the first time in 1861,
but it proved impossible to achieve
this until the fourth attempt in 1883.
The school was established with the
financial support of Abdulhamid II
(1876-1909) and this was the reason
the school had Hamidiye in its name.
The famous education historian
Osman
Ergin
describes
the
establishment of this school as
follows: None of the schools have
been established with more
difficulty and uncertainty than this
school.5 Prof. Dr. Yahya Akyüz of
Ankara University, an education
historian, evaluates the reasons
behind the establishment of this
school as follows: The State felt the
necessity to orientate the Muslim
population, who were used to
working in military and civil
bureaucracy or religious services,
towards trading. This was why this
school was established. 6
All of the aforementioned
statements show that in the second
half of the 19th century, The
Ottoman Empire tended to adopt
This school was transferred to Ankara in 1948 and then named Faculty of Political Science.
Today this school is called Marmara University.
Osman Ergin: Türkiye Maarif Tarihi, Cilt 3-4, p. 1131 vss., 1977, ‹stanbul.
Yahya Akyüz: Türk E¤itim Tarihi, p.207, 5. Bask›, 1994, ‹stanbul. For further information:
Oktay Guvemli, Türk Devletleri Muhasebe Tarihi- Tanzimat’tan Cumhuriyet’e, Cilt: 3, 2000,
‹stanbul.
44
the double-entry accounting system
within the context of the
westernization movement which
facilitated the enhancement of this
new method.
Adoption of The double-entry
Accounting System
In 1879, the necessity to reorganize the Ministry of Finance,
which was established in 1838, was
apparent. For this reason, the Prime
Ministry prepared a memorandum
permitting the subject to be
examined on demand and sent it to
the Ministry of Finance. 7 The
Ministry of Finance examined the
topic with the relevant commission,
Umur-i Maliye Komisyonu, and
proposed a couple of suggestions.
One of these suggestions included
the adoption of the double-entry
accounting system: The main failing
of the Ministry of Finance is in not
keeping the records according to
the double-entry accounting system.
The records of incomes and
expenditures do not give complete
information and the books are not
kept according to the double-entry
accounting system. These are the
other failings of the Ministry of
Finance. Hence, the ministry should
make the necessary changes. This is
not a difficult duty. The double-entry
accounting system should be
taught. The ministry should be
divided into two departments: the
old and the new. The new
department should keep records
according to the new method. The
Ministry of Finance communicated
this opinion to the Prime Ministry
and drew attention to the fact that
in order to overcome the difficulties
that the employees would face, they
should be given the necessary
education. As a result of this, the
ministry proposed to start the
application of the new system in the
new financial year, in March 1880.8
Based on the above, the decree of
The Sultan was declared in January
1880 and the legal procedure was
complete.9The whole document was
composed of the letter written by
Sadrazam (the Prime Minister) and
the sealed ratification document of
The Sultan. The Sultan’s statements
were as follows: The memorandum
and attached documents were
presented to The Sultan and after
reviewing the documents it was
found appropriate to accept the
proposal… This gives permission for
its application.
This decree, accepted 126 years
ago, is a turning point in Turkish
accounting thought. Nevertheless,
the application process was full of
difficulties. After all, the State had
been obliged to give up an
accounting system which had been
in use for 580 years, and replace it
with a new system which had been
7 Baflbakanl›k Osmanli Arflivi, DUIT 37-2/7 - 2/6..
8 Baflbakanl›k Osmanl› Arflivi, DU‹T 37- 2/7- 2/2
9 Baflbakanl›k Osmanl› Arflivi, DU‹T 37- 2/7 – 2/4
45
developed in another civilization. But
despite all these difficulties, the
State overcame this transition period
in a relatively short time as a result of
its deep administration culture.
2. The Developments in
Turkish Accounting
Thought at the Beginning
of the 20th century
While entering the 20th century,
Ottoman accounting culture was
committed to the application and
the education process of the doubleentry accounting system. Nevertheless,
the Empire was on the eve of
disorder, wars and crises. Balkan
wars, World War I and The Turkish
Independence War, all occurred
successively in a short period. It is
certain that this kind of an
environment was not conducive to
the development of accounting
thought. However, there were
several activities that affected the
development and education of
accounting. In addition, several
books concerning the double-entry
accounting system were published.
All these developments can be
classified in four groups.
a. Efforts to Found The Private
Sector
The double-entry accounting
system was developed on the basis
of the capitalist system. The
application tool of the capitalist
system is private sector institutions.
The professional chambers are the
professional organizations of the
private institutions. Because of these
reasons, the establishment of
Commercial and Industrial Chambers
in Turkey is noteworthy. The main
function of these chambers is to
promote the development of
working areas of their members.
Using the results of these studies,
the working areas will develop and
this will create the necessity for
accounting. As a result of this, the
application of the double-entry
accounting
system
will
be
widespread. In this context, the
establishment of Istanbul Chamber
of Commerce in 1879 is important,
because it was in the same period
that the applications of the doubleentry accounting system started. In
the founding statute of the
Chamber, Article 7 indicated the
duties of the Chamber as follows:
The aim of this Chamber is to get
the necessary measures to develop
trading and industry and to assist
the necessary changes… to assist
the renovation process. These duties
included assisting the application of
the accounting recording system.10
At the beginning of the 20th
century, activities to enhance the
professional chambers increased. For
this purpose, Regulation of
Chambers of Trade and Industry was
published in 1911. 11 This regulation
included similar statements to the
10 Düstur (Osmanl›’n›n Resmi Gazetesi): 1. Tertip, 4. Cilt, Sayfa 673-674.
11 Düstur (Osmanl›’n›n Resmi Gazetesi): II. Tertip, 2. Cilt, Sayfa 322- 330.
46
Statute of Istanbul Chamber of
Commerce. According to Article 13
of this regulation the Chambers had
the power to ratify inventory and
balance sheets based on their wish.
However, this could not proceed
well.
In the same years (1910-1913),
tradesmen’s associations were
established. The regulations of these
associations included the same
duties, too. 12
These professional organizations
were contemporary establishments
which facilitated the development of
the private sector. Furthermore,
these organizations contributed to
the organization of financial
statements directly and indirectly. All
of these were encouraging Turkish
society towards trading. It is
observed that during the early
Republic period, these organizations
had an important mission: to solve
financial disputes. For instance,
Chambers of Commerce could chase
up the members who did not pay
their vouchers, and could determine
the wealth of merchants. By forming
arbitration councils they could also
solve the problems occurring among
their members.
b. Reforms in The Banking
System, Tax Law and Financial
Administration of the State
Important developments regarding
Turkish accounting thought were
initiated in the early part of the 20th
century. The Republic period, based
on this background, enabled a
contemporary style of accounting
thought. In order to have any
development in accounting thought,
it is necessary to have the
appropriate environment. The
aforementioned professional chambers
are an important part of this
environment. The foundation of
national credit banks was another
important factor. The establishment
of Ziraat Banakasi (Agriculture Bank)
(1868), Emniyet Sand›¤› (Security
Fund) and the National Stock
Exchange were important steps in
strengthening the financial structure
of private institutions.
At the beginning of the 20th
century in western countries, the
developments seen in the tax
regulation system affected the
accounting applications in a positive
way. The State began to collect tax
incomes based on the accounting
records and financial statements. All
of these applications made the
financial statements more important
which
contributed
to
the
development of accounting thought.
Temettu (dividend tax) started to be
applied 13 , but it was not applied (as
it is defined) to get tax from profits.
Rather, it was applied to get tax
from sales or expenditures written in
accounting records. This was the
first serious step by the State
12 Düstur (Osmanl›’n›n Resmi Gazetesi) : II. Tertip, 2. Cilt, Sayfa 123 vss.
13 Düstur (Osmanl›’n›n Resmi Gazetesi) : II: Tertip, 7. Cilt, Sayfa : 148-159.
47
towards the collecting of taxes
through accounting records. There
were similar applications in the
second half of the 19th century, but
these were more ‘district’ oriented.
The institutions concerned with
trading, industry and services started
to organize their accounting records
in a more disciplined way.
for the audit of foundations (1909);
Law of Accounting Methods which
was related to the budget
applications of the State (1910). 15
All of these regulations were made
in the years of various wars, but they
set up the appropriate environment
for the development of accounting
thought in the Republic period.
In this period, the State also
started to support commercial and
industrial firms (1913). Within the
context of this support, the firms
were exempted from paying taxes
for the imports of investment goods;
the taxes which were received from
the imports were decreased and the
taxes which were received from the
salaries of employees were
decreased. All of this support could
be followed through accounting
records. Therefore, the accounting
applications became much more
important. 14
c. Developments in Accounting
Education
The developments in accounting
education at the beginning of the
20th century can be analyzed in two
parts. The first one is the
developments in the institutions that
provide accounting education. The
second one is the publications of
accounting educators.
At the end of the 19th century,
there were important developments
in the Ottoman accounting
education system. Following the
adoption of the double-entry
accounting system, trading and
accounting was taught in junior high
schools. This process continued into
the beginning of the 20th century. In
1908, idadis (high schools) were
reformed and became sultaniye (a
special group of senior high school).
After 1913, several business schools
were opened. The aim of these
schools was to encourage society in
trading and industry, and to produce
graduates that know accounting.
Regarding the graduate schools,
In order to stay in harmony with
developing conditions, the State also
felt the necessity to renovate its
financial structure. For this purpose,
it prepared several regulations.
These were as follows: the
regulation that determined the
qualifications of accountants who
work in State bodies (1877); the
regulation that drew the framework
of budgets of provinces of the
empire (1911-1912); the regulation
that founded accounting departments
14 Düstur ( Osmanl›’n›n Resmi Gazetesi) : I. Tertip, 3. Cilt, Sayfa : 398.
15 Daha fazla bilgi için bak›n›z : Oktay Güvemli, Türk Devletleri Muhasebe Tarihi, Cumhuriyet
Dönemi, XX. Yüzy›l, Sayfa : 76-123, 2001 ‹stanbul.
48
Istanbul Darülmuallimin (School of
Teachers) was reformed in 1915 as a
first step to meet the need of educators in high schools. Secondly, accounting programs in The School of Financial Officials were strengthened. 16
During World War I, Hamidiye Ticaret Mektebi (today’s Marmara University), which was established in
1883, was developed. This was the
most important step regarding the
progress of accounting education.
Hamidiye Ticaret Mektebi (school of
trade) had the name of The Sultan in
its title. The reason was explained in
a previous chapter. In the aftermath
of the establishment of the Second
Constitutional Monarchy in 1908,
Abdulhamid II was dethroned. Therefore the name of the school was
changed and it was given the name
Ticaret Mekteb-i Alisi (School of Trade). During World War I, The Ottoman Empire was an ally of Germany;
as a result of this, German culture
was influential in many respects as
well as in Turkish accounting system.
Nevertheless, Germany lost the war,
so this influence occurred only for a
short time.
In the past, The School of Trade
adapted the education program of
similar French schools. During World
War I, the program of this school
was adapted from Germany. But it
was an intensive program, so it could not be applied completely. In this
respect, it was felt necessary to take
several precautions in order to apply
this intensive program. The schedules were divided into two periods
with three years in one period and
three years in the second period. The
first period was called K›sm-i Evvel
and it was a preparation for the second period. The second period included a program for ‘high trading’
education. Both of the periods had
accounting courses in their programs. In the time of the Republic, the
first period was separated and became trading high school. 17
All of this shows that accounting
education had become an important
matter since the beginning of the
20th century. It is possible to see similar developments in the publications of accounting educators.
d. Accounting Course Books in
the 20th Century
We observe that books concerning the double-entry accounting
system were published at the beginning of the new century. During this
period, several Armenian authors
such as Serkiz Nihat, Kirkor Komurciyan, were influential. These people
were giving courses at Ticaret Mekteb-i Alisi (School of Trade). We
know that both of the professors gave courses and served as consultants
in large firms until the 1940s. These
professors were influenced by German and French applications. They
wrote their books based on this inf-
16 Oktay Güvemli : Türk Devletleri Muhasebe Tarihi, Cumhuriyet Dönemi, XX. Yüzy›l, Sayfa:
359 vss., 2001, ‹stanbul.
17 Oktay Güvemli: ‹ktisadi Ve Ticari ‹limler Akademileri Tarihi, Sayfa :105 vss. 2003, ‹stanbul.
49
luence and their background in consultancy. It is necessary to draw attention to the fact that Serkiz Murat’s three books were particularly
important. These books were Usul-i
Maliye (Method of Finance) (1914),
Defter-i Kabirli Yevmiye (American
Recording Method) (1914), Muhasebe-i Tüccariye Mebadisi (Commercial
Accounting Records) (1920). 18
In Usul-i Maliye (Method of Finance) he established which books and
ledgers were to be kept by enterprises. But the book mainly included information about the banking
system. Furthermore, it gave information about assurance accounting.
He wrote his book about the American recording method, by benefiting
from German authors’ books. While
explaining the American recording
method he wrote the following: This
method does not need very much labor; it is convenient for keeping records compatible with the regulations and it is suitable for applying accounting in the best way.
His book entitled Muhasebe-i Tüccariye Mebadisi (Commercial Accounting Records) was a little bit different from the others. In the foreword, he stated that the translation
of Western contemporary authors’
books had had several negative effects. Due to his background as a
practitioner, he was aware of the necessities of the accounting professi-
on. For this reason he had all the qualifications for writing such a book.
In this book he stated that the book
was to be the first in a series. This
was why he gave great importance
to the terminology in this book.
These books were the first examples of accounting course books. Therefore, they had some deficiencies,
namely there were translation problems. However, we should keep in
mind that it was a war period, so the
authors of these books created important resources. They wrote books
concerning banking, assurance
system, industrial enterprises, and
commercial institutions. Furthermore, they wrote books on agricultural
institutions; ‹brahim Faz›l’s book entitled Ameli-i Usul-i Muhasebe-i Ziraiye (Agricultural Accounting Methods), written in 1921 can be given
as an example. 19
In the pre-republic period, at the
end of the 19th century and at the
beginning of the 20th century, there
were significant developments in accounting thought in The Ottoman
Empire. The characteristics of this period can be listed as below:
- The ladder method which was
used for centuries was abandoned.
With the influence of reform movements, the double-entry accounting
system was adopted and started to
be used. Expansion of accounting
education contributed to the lear-
18 Oktay Güvemli: Türk Devletleri Muhasebe Tarihi- Cumhuriyet Dönemi XX. Yüzy›l, Sayfa:
196 vss., 2001, ‹stanbul.
19 Marmara University Faculty of Economics and Administrative Sciences Library, 1113.
50
ning of the double-entry accounting
system to a great extent.
- Nationalism was emerging day
by day. It had an impact in every aspect of life. Nevertheless, most of
the accounting books were translated from French to Turkish. Hence, it
was inevitable to use French words
in accounting literature.
- With the affect of the nationalistic policies of Ittihat ve Terakki (the
party in power), Turkish society was
encouraged to deal with industry
and trading in addition to the activities in the banking sector. The successful education system of Ticaret
Mekteb-i Alisi (School of Trade),
which prepared an important substructure for the private system, facilitated the aforementioned aim of Ittihat ve Terakki.
- The State started to develop the
capitalist economy from public economic policies. This atmosphere facilitated the adoption of the doubleentry accounting system.
- Accounting education and accounting course books clearly show
that the double-entry accounting
system was being adopted. But, it
was a fact that in the meantime, the
single-entry accounting system was a
matter of discussion which shows
that it was a transition period.
- This was the period in which taxes started to be collected through
accounting records. The Ottoman
Empire adopted this system too, so
temettu (dividend tax) was put in
force during this period. This improved the importance of accounting
which initiated a period of dependence of accounting on State bodies.
The above explanations show that
the developments which occurred in
this period formed the substructure
of accounting thought in Republic
period. Based on this background,
The Turkish Republic could form its
own accounting thought compatible
with the reformative structure that it
created.
3. Influence of The Turkish
Republic’s Reforms on
Accounting Thought
The influence of reforms, which
were made following the establishment of The Turkish Republic, is noteworthy. These reforms were based
on the principle of building a secular
system. The formation of a contemporary legal system was the primary
result of the adoption of a secular
system. In this respect, additional regulations relevant to reform the education system, military bodies, and
economic structure were made successively. There were also innovative
legislations of a social nature such as
reforms on dressing, which created a
modern look. All of these reforms
were made within the framework of
a grand respect to traditions of the
society. It is certain that all of these
reforms made by the leadership of
Atatürk influenced accounting thought to a great extent.
Accounting thought in western
countries did not develop in a similar
atmosphere which deeply affected
social and economic life. Instead,
their accounting history was formed
51
in a capitalist economy and in a
system compatible with this economical structure. For this reason, the
western accounting historians maintain accounting history studies within the context of accounting recording culture. They evaluate accounting as part of the service sector, so
they state the fact that accounting
develops in parallel to the changes in
the economical structure that it serves. They generally pay insufficient
attention to political and social changes in terms of their affects on accounting. They have merits in behaving
like this, because they had not had
deep changes in their political and
social life for centuries. However, the
whole world does not consist only of
western countries. There are other
accounting systems in other parts of
the world. These accounting systems
developed within the economic and
social environments that they belonged to. The Middle East has been an
interesting place in terms of having
different changes in its history.
When it gained political stability, it
achieved economical development
which provided the development of
accounting thought. Because of all
these reasons, a Middle Eastern accounting historian thinks differently
from a western accounting historian.
It would not be a complete analysis of Turkish accounting thought
without mentioning the transition
from a commercial life, which was
dominated by religious laws, to a secularly dominated system, with the
adoption of the Latin alphabet instead of the Arabic alphabet, and the
adoption of The Commercial Code 20 .
In this context, The Turkish Republic’s reforms are noteworthy 21.
The reforms which transferred
Turkey to a modern country regarding political, social and economic life can be listed as follows: Turkish Civil Code (1926), Legal Procedures
Code (1927), Commercial Code
(1926, 1929), Income Tax Code
(1926-1927), Code on Compulsory
Use of Turkish Language in Economic Enterprises (1926), Code on
Adoption and Use of the Turkish Alphabet (1928), Code for Closing Istanbul Dar-ül Fünun and Foundation of
Istanbul University by the Ministry of
Education (1933). There were also
other reforms which can be added
to this list. Some of these reforms af-
20 The Commercial Code that was passed under the title Acte de Commerce in Napoleon’s time
in 1807 in France was adopted by The Ottoman Empire in 1850, but could not be enforced
because then the Islamic rules prevailed in commerce. It is this Commercial Code that was
revised in 1926, which the Republic adopted suitable to its needs.
21Just before the establishment of The Turkish Republic reforms, a socialist revolution occurred
in Russia. This revolution was influential in every aspect of life as well as on accounting. Even
though the double-entry accounting system was used, the application was different. However,
before the revolution Russia had a similar system to European countries. For this reason the
socialist revolution made a contrary impact compared with The Turkish Republic’s reforms
because Turkey had a different background, namely it had an economic life which was shaped
by Islamic laws.
52
fected accounting thought directly
whereas some of them affected it indirectly. But it is certain that all of
them had a positive effect, because
all of them were a sign of a change
in comprehension.
It is appropriate to dwell upon some of these reforms:
a. Commercial Code (1926)
The Commercial Code that was
adopted in 1850 could not be enforced because then Islamic rules prevailed in commerce. It was revised in
1926 and adopted by the Republic
subject to its requirements.
Article 66 and 79 of this law are
related to the books that merchants
had to keep. The books classified as
compulsory are below :22
- Journal Book: This is a book subject to attestation according to relevant articles of the law. The structure and content of the records that
must be written in the book were listed in the relevant articles of the law
which obliged the keeping of daily
records.
- Inventory-Balance Sheet Book: It
was defined in Article 70 of the law.
It was provided in the law that all records to be made in this book would
be not on their nominal values but
on current stock exchange prices. Also bad debts would not be recorded
in this book.
Besides these two books, there
was also another book that was
mentioned in the law. It was entitled
‘Copies Book’ and it was defined as
a book where the correspondence of
the merchant would be recorded in
chronological order. The former two
books were compatible with current
accounting perception. The last book
however, was not necessary if an
archive system was in use.
The law adopted accountancy as
a profession, which is another point
that must be addressed regarding
the law. Merchants were not obliged
to keep their books personally. They
could employ staff for this purpose
as provided in Article 68.
b. Income Tax Law (1926)
By the adoption of this law, the
application of tax collection through
accounting records improved. This
law countered a deficiency caused
by the Commercial Code. In Article
15 of the Law, the keeping of a ledger became compulsory; this had not
been compulsory in the Commercial
Code. Furthermore, provisions of Article 12 concerning balance sheet details about assets and debts are
much more significant. 23
The most important influence of
this law on accounting applications
was that tax was levied on the profit
declared in the financial statements.
22 Oktay Guvemli: Türk Devletleri Muhasebe Tarihi, Cumhuriyet Dönemi, XX. yy., pp.148154., 2001, ‹stanbul.
23 Bar›fl Sipahi and Irem Nuhoglu, “Influence of The Turkish Republic’s Revolutions on
Accounting Applications (1926-1928)”, The paper prepared for the 11th World Congress of
Accounting Historians, 2006, ‹stanbul.
53
This influenced the modernization of
accounting thought positively. Based
on this impact, the Tax reform made
in 1949 could move forward the accounting applications, which took
place during the century.
c. The Code about the Obligation
to Keep Records in the Turkish
Language (1926)
Within the appropriate conditions
drawn by the capitulations given to
foreign firms, such firms located in
Turkey were keeping their books
and issuing their financial statements
in their native languages. The State
did not intervene in their internal issues as long as they obeyed the legal
rules. However, this was not able to
be maintained within the nationalistic framework of the new republic.
Hence, this situation had to be changed. According to the new system,
these foreign firms had to keep their books in Turkish in order to be audited.
This law did not only enforce keeping the books in Turkish, but also
made it obligatory to make the agreements and domestic correspondence in Turkish. 24
d. Code on Adoption and Application
of the Turkish Alphabet
During the end of the 19th century and the beginning of the 20th
century, the application of the double-entry accounting system became
widespread in Turkey. The doubleentry accounting system is based on
writing from left to right in western
countries. However, according to
the Ottoman writing style, the Arabic alphabet was in use which was
based on writing from right to left.
For this reason, whether writing on
the left or the right in the balance
sheet was a confusing matter.
Following the Code on Adoption
and Application of the Turkish Alphabet 25 in 1928, a great increase in
accounting education and the use of
the double entry accounting system
was seen. All of this shows that the
adoption of the Latin alphabet not
only modernized Turkish methods,
but also modernized accounting thought.
4. Conclusion
Regarding the development of
the double-entry accounting system
during the fifty-year period, namely
the years starting from the end of
the 19th century to the 1930s, the
modernization of accounting thought passed through important stages. Forty years of this period belonged to The Ottoman Empire era.
Only the last ten years occurred in
the time of The Turkish Republic.
The first application of the double-entry accounting system occurred
at the end of the 19th century. It is
noteworthy that during this period,
accounting education, in particular
in high schools, became important
to a great extent. We witness a similar endeavor at the beginning of the
20th century. In 1908, the Second
24 Compulsory Use of Turkish Language in Economic Enterprises Law no. 805, 26 April 1926.
25 Code on Adoption and Application of Turkish Alphabet, November 1, 1928.
54
Constitutional Monarchy was established, which was successively followed by wars. During the World War
I years (1914-1918), Ittihat ve Terakki, the party in power, pursued a nationalistic policy, which built the infrastructure of The Turkish Republic
reforms. Within the framework of
this policy, a national banking
system and industrialization were encouraged. In this context, Turkish society, which had only been involved
with the military and State bureaucracy, started to be part of the economic life of the country. It is certain
that this kind of nationalist movement also influenced accounting thought. Nevertheless, the presence of
capitulations to foreign firms and religious laws prevented the modernization of accounting applications
and education.
Following the establishment of
The Turkish Republic, modernization
through the adoption of a secular legal system became a part of economic and social life, too. In this context, the adoption of contemporary
laws such as Commercial Code, Income Tax Code, Code on Adoption
and Use of the Turkish alphabet, accelerated the development of Turkish accounting thought. Today we
are immersed in modern Turkish accounting thought, and we are duty
bound to recognize the efforts made
during the end of the 19th century
and the beginning of the 20th century.
REFERENCES
Books
- Ahmed Ziyaeddin: Fenni Defteri, 1892,
Istanbul (Istanbul University Ancient Books Library, No: 79431
- Oktay Guvemli, Türk Devletleri Muhasebe Tarihi- Tanzimat’tan Cumhuriyet’e,
Cilt: 3, 2000, ‹stanbul.
- Oktay Guvemli, Türk Devletleri Muhasebe Tarihi, Cumhuriyet Donemi, XX. yy,
Cilt: 4, 2000, ‹stanbul.
- Osman Ergin: Türkiye Maarif Tarihi, Cilt
3-4, 1977, ‹stanbul.
- Suleyman Asaf: Muhtasar Usul-i Defteri, 1882, Istanbul (Istanbul University
Library.
- Yahya Akyüz: Türk E¤itim Tarihi, 5. Bask›, 1994, ‹stanbul.
Others
- Bar›fl Sipahi and Irem Nuhoglu, “Influence of The Turkish Republic’s Revolutions on Accounting Applications (19261928)”, the paper prepared for the 11th
World Congress of Accounting Historians, 2006, ‹stanbul.
- Basbakanlik Osmanli Arsivi, DUIT 372/7 - 2/6.
- Basbakanlik Osmanli Arsivi, DUIT 372/7 - 2/2.
- Basbakanlik Osmanli Arsivi, DUIT 372/7 - 2/4.
- Code on Adoption and Application of
the Turkish Alphabet, November 1, 1928.
- Compulsory Use of Turkish in Economic
Enterprises Law no. 805, 26 April 1926.
- Düstur (Osmanli’nin Resmi Gazetesi): I..
Tertip, 4. Cilt.
- Düstur (Osmanli’nin Resmi Gazetesi): II.
Tertip, 2. Cilt.
- Düstur (Osmanli’nin Resmi Gazetesi): II.
Tertip, 2. Cilt.
- Düstur (Osmanli’nin Resmi Gazetesi): II.
Tertip, 7. Cilt.
- Düstur (Osmanli’nin Resmi Gazetesi): I.
Tertip, 3. Cilt.
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