ABSTRACT
As is well known, the audit dates in Britain from at least medieval times, when the auditor on landed estates literally heard the accounts read out and checked on the lord’s behalf that his steward had not been negligent or fraudulent (Edwards 1989: 37; for a summary of the early history of auditing see Higson 1987: 14-30). Then, as trading and manufacturing companies multiplied in the eighteenth century, accountants were commonly employed as auditors to check that all was in order with the investments of partners or shareholders. An audit certificate: ‘Examined and found right, Bristol, December 20, 1797’ forms part of the records of the accountancy firm of Josiah Wade (Howitt 1966: 245). But, as Lee (1988: xvii) has argued, the biggest fillip to the audit process was given by changes in the economic environment in the nineteenth century: ‘developments in the economic structure of civilizations caused audit needs. Industrialization created the need for financing. This created, in turn, the need for incorporation. And this created the need for financial reporting of audited information’.
