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Origin and Concept of Auditing

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Helna is a postgraduate in Commerce who is working as a Manager. She loves sharing informative information with her readers.

Origin of Audit

Checking clerks were appointed in those days to check the public accounts. To locate frauds as well as to find out whether the receipts and payments are properly recorded by the person responsible was the main objective of Auditing of those days

Checking clerks were appointed in those days to check the public accounts. To locate frauds as well as to find out whether the receipts and payments are properly recorded by the person responsible was the main objective of Auditing of those days

Concept of Auditing


From the time of ancient Egyptians, Greeks and Romans, the practice of auditing the accounts of public institutions existed. Checking clerks were appointed in those days to check the public accounts. To locate frauds as well as to find out whether the receipts and payments are properly recorded by the person responsible was the main objective of Auditing of those days.

Origin of Auditing.

During the 18th century industrial revolution brought in large scale production, steam power, improved facilities and better means of communication. This resulted in the origin of Joint stock form of organizations. Shareholders contribute capital of these companies but do not have control over the day to day working of the organisation. The shareholders who have invested their money would naturally be interested in knowing the financial position of the company. This originated the need of an independent person who would check the accounts and report the shareholders on the accuracy of the accounts and the safety of their investment.

The Indian Companies Act, 1913 defined the qualification, power, duties and procedure of appointment of the Auditor. The audit of Joint Stock Company made compulsory by this Act. Educational qualification certificate were issued by the central and state governments to those who undergone the prescribed course. In the year 1949, Chartered Accountants Act was passed. Companies act 1956 further elaborated the provisions related to the auditing and accounts of the companies. Now a person to do the auditing must be qualified as per the standards of the Institute of Chartered Accountants of India.

  • Advantages of Auditing
    Advantages of Auditing It is compulsory for all the organizations registered under the companies act must be audited. There are advantages in auditing the accounts even when there is no legal obligation for...
  • Objectives of Audit
    For a better understanding we could classify the objective of audit as: 1. Primary Objectives 2. Secondary Objectives. Primary Objectives: To determine and judge the reliability of the financial...
  • Definition of Auditing
    The word 'Audit' is originated from the Latin word 'audire' which means 'to hear'. In the earlier days, whenever there is suspected fraud in a business organization, the owner of the business...

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2010 Helna

Comments

kabanda jessica on January 15, 2018:

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Jitendra kumar on November 13, 2017:

Thanks sam it's so helpful

kultaran singh on January 22, 2014:

thanks a lot.....to d writer very descriptive and useful article........................ :)

jamilkhan on July 01, 2012:

my ambition is 2b an auditor in my feature just pray 4me bcos i like d course auditing

jamilkhan on July 01, 2012:

my ambition is 2b an auditor in my feature just pray 4me bcos i like d course auditing

Pearl on May 02, 2012:

Sometimes things get really hard and even think about ....any way thanks for ur contribution

Saliou Jawo on October 20, 2010:

Thanks a million cus ur site has been useful my research.

Helna (author) on April 14, 2010:

Hi Faybe Bay!

Thanks for your comment.

Look forward to visiting your hubs

Thanks once again

Faye Constantino from Florida on February 23, 2010:

Nice content! I think as, you are sort of new, I have heard round the forum, the longer the better. Guess it gives them more room for ads. LOL.

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