To help understand modern financial accounting theory ('FAT') and its role in the development of finance and business, I consider two current mainstream histories of its development and offer a third alternative. The standard setters’ version is that increasingly FAT is rationally derived from a basically coherent conceptual framework, currently focused on 'comprehensive income' as measured by 'changes in assets and liabilities', in turn preferably measured at fair values. However, examination here of several recent FASB/IASB standards and exposure drafts shows that instead they unavoidably bear the marks of the history of a variety of now embedded practices that have shaped thinking about, and vested interests in, what is 'good accounting'. By contrast, some recent academic versions of history focus on how 'conservative', historical-cost based accounting principles have rationally evolved to provide an anchor on which to base appraisal of firms’ and managers’ performance, prospects and risks, and supply the kind of information that investors and other parties in the capital markets need to help overcome the information asymmetry between them and corporate managers. After analyzing the limitations of this second type of history, I argue that even a brief genealogical examination of the conditions of possibility that have led to the growth and changes in accounting and auditing practices and discourses, and in the power-knowledge relations that they have engendered at different stages over the millennia of recorded history, suggests that their power has always been more that of 'institutional rationalized myth'. The twin rational myths of the objectivity of accounting and of auditing together provide the structure that offers the comfort necessary to enable the various agents in the modern, increasingly global, economy to undertake and finance the risks of acting 'at a distance' and across time. This modern, grammatocentric accountability increasingly extends throughout the institutions that coordinate modern societies, in the rising East as well as in the established West. Exploring how much of FAT is rational and reflects some objective 'economic reality' and how much is myth and is subjectively, socially constructed; and, again, how much might be improved and how much is intractable, are the major questions now for accounting, auditing and finance policy-making and research. This requires further detailed comparative international historical understanding of how accounting and auditing have variously operated, within businesses and other organizations and in shaping markets, across different countries and cultures.