INTRODUCTION TO AUDIT
In ancient days, the owners of the business verify their accounts by expert accountants or book keepers to detect errors and frauds. Even the Kings and Zamindars used to listen from the accounts regarding receipts and payments of their kingdom.
At the end of Fifteenth Century due to revival in
Italy, there was a rapid growth in industry, trade and commerce. The principle
of double entry system was introduced by Luca Pacioli, a famous Italian
mathematician. Besides cash transactions, credit transactions are recorded in
books, as a result complexity of accounts was increased.
As a result of Industrial revolution in England in the Eighteenth century, there was a substantial increase in the volume of business. A rapid increase in commercial activity, emergence of banking, insurance, joint stock companies and growing activities in the Government sector led the need for audit of accounts.
The technological development, globalization of
business, complex business environment, requirement of the interested parties
regarding true accounts, necessity of the government to get audited accounts
for different purposes have influenced auditing to be used as a fact-finding
tool and have caused a greater responsibility in the technique, scope,
professional, legal, moral and ethical responsibilities from the auditors.