The Evolution of The Concept of Auditing

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Introduction

Audit is a word derived from the word Auditus, from Latin, which means “a hearing”, past participle of audire “hear”. To hear or see whether an event is true. This outlines the work of auditors in general.

The Audit activity has been in place since 4000 BC, where it mainly focused on checking of financial transactions. Later it developed to a modern verification activity during the industrial revolution. Thereafter auditing was introduced in America where foreign investors demanded independent checks on financial soundness of companies’ records. The evolution of the concept of auditing gave rise to a distinction between internal and external auditing. Internal auditing is an activity that exists within an organisation; this enables internal auditors to fulfil their function in an entity as the eyes and ears of management.

Body

During the 1900s economic growth made it difficult for management to maintain control of business activities and operational efficiency. To overcome these problems people known as internal auditors were appointed to review and report on effectiveness of corporate governance, risk management and control processes within the organisation. This gave rise to different definitions of internal auditing in the course of time. (Coetzee, Bruyn and Fourie)

Today by definition, In the Institute of Internal auditor’s International Professional Practices Framework (A guidance for internal auditors).” Internal Auditing is an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operation. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk...

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...ebsite. 31 April 2014 .

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4. Coetzee, Phila, et al. Internal Audit: An Introduction 3rd edition. LexisNexis, 2012.

Mango. Financial governance: Internal Audit. 2014. 2 May 2014 .

5. Ramabulana. Internal Audit Service. 1 April 2014. 25 April 2014 .

6. Wyk, Anton van and Shirley Machaba. “Resources: Online Articles.” 1 April 2014. bbrief. 15 April 2014 .

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