The Importance of Internal Auditing

Minor questions and problems that arise during an scrutinize should be discussed and settled at the lowest supervisory direct (Bennett, 1969, p. 40).

Historians believe that record keeping originated about 4000 B.C., when ancient civilizations in the Near East began to establish organized governments and businesses. The governmental score corpse of the Zhao dynasty (1122-256 B.C.) in China included an elaborate budgetary process and audits of all governmental departments. In fifth-century, B.C. Athens, the popular lying controlled the receipt and disbursement of public funds. The public finance system included government auditors who examined the records of all office holders at the period of their terms. In the private sector, managers of estates conducted audits of the accounts. semipublic finance in the popish Republic was under control of the Senate, and public accounts were examined by a staff of auditors supervised by the treasurer. The Romans maintained segregation of duties in the midst of the officials who authorized taxes and expenditures and those who handled receipts and payments, and, like the Greeks, devised an elaborate system of checks and counterchecks (Sullivan, Gnospelius, Defliese, & Jaenicke, 1985, p. 10).

The oldest last accounting records and references to audits of English-speaking countries are those of the Exchequers of England and Scotland,

Internal auditors are employed by the enterprises whose activities they audit. The independence of inseparable auditors comes from their organizational status--essentially, the level of management to whom they report--and their objectiveness. For external auditors, such as CPAs, independence derives from the absence of any obligation to or monetary interest in their client, its management, or its owners.

Colbert, J.L. (1993, January). Discovering opportunities for a naked as a jaybird work relationship between versed & external auditors. National Public Accountant, pp. 40-42.

The next 200 years saw the growth of towns in place of manors, factories in place of guilds, and the beginning of widespread commerce.

This introduced new accounting concerns, which focused on the ownership of property and the reckoning of profits and losses in a business. audited accounting began to evolve from an auditory process to a close examination of written records and the exam of supporting evidence.

The AICPA Statement on Auditing Standards 65, the Auditor's Consideration of the Internal Audit Function in an Audit of Financial Statements, significantly affects the works relationship between external auditors and internal auditors. The major pabulum of the standard include allowing the external auditors to place increased confidence on work performed by internal auditors; outlining major areas in which the external auditors whitethorn use work done by internal auditors in certifying financial statements,; providing guidance in organize the work of the internal and external auditor; suggesting methods of evaluating the competence and objectivity of the internal auditor; outlining ways that the external auditor may evaluate the effectiveness of the work done by the internal auditor; and discussing how internal auditors may provide direct financial aid to the external auditor (Colbert, 1993, p. 40).

Bennett, J.V. (1968). Administering the company accounting function. Englewood Cl
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