Sunday, August 4, 2019
The History of Auditing :: GCSE Business Marketing Coursework
The History of Auditing Abstract The evolution of auditing is a complicated history that has always been changing through historical events. Auditing always changed to meet the needs of the business environment of that day. Auditing has been around since the beginning of human civilization, focusing mainly, at first, on finding efraud. As the United States grew, the business world grew, and auditing began to play more important roles. In the late 1800Ã¢â¬â¢s and early 1900Ã¢â¬â¢s, people began to invest money into large corporations. The Stock Market crash of 1929 and various scandals made auditors realize that their roles in society were very important. Scandals and stock market crashes made auditors aware of deficiencies in auditing, and the auditing community was always quick to fix those deficiencies. The auditorsÃ¢â¬â¢ job became more difficult as the accounting principles changed, and became easier with the use of internal controls. These controls introduced the need for testing; not an in-depth detailed audit. Auditing jobs would have to change to meet the changing business world. The invention of computers impacted the auditorsÃ¢â¬â¢ world by making their job at times easier and at times making their job more difficult. Finally, the auditorsÃ¢â¬â¢ job of certifying and testing companiesÃ¢â¬â¢ financial statements is the backbone of the business world. Introduction Auditing has been the backbone of the complicated business world and has always changed with the times. As the business world grew strong, auditorsÃ¢â¬â¢ roles grew more important. The auditorsÃ¢â¬â¢ job became more difficult as the accounting principles changed. It also became easier with the use of internal controls, which introduced the need for testing, not a complete audit. Scandals and stock market crashes made auditors aware of deficiencies in auditing, and the auditing community was always quick to fix those deficiencies. Computers played an important role of changing the way audits were performed and also brought along some difficulties. A Brief History of Early Auditing Auditing has existed since the beginning of human society. Auditing was used mostly for the detection of fraud and was done through extensive detailed examination from ancient times until the late nineteenth century (Lee, 1988). Fraud was a great concern during the early history of auditing, because internal controls were not used or not used effectively until the twentieth century. The late nineteenth century was a turning point in auditing history, when laws like the English Companies Act of 1862 were enacted.