BACKGROUND                                                                                           

                             AUDITING MEANS TO EXAMINE THE ACCONTING DATA. IN ORDER TO DETEUMIN THE   RELIBILITY OF THE FINANCIAL STATEMANTS. THE FIRST COMPANIES ACT WAS INTRODUCED IN 1844 IN ENGLAND AND AUDIT BECAME STATUTORY REQUIREMENT FOR JOINT STOCK COMPANIES. THE FIRST PUBLICATION ON DOUBLE ENTRY SYSTEM OF BOOK COMES IN 1494 IN WHICH AUTHOR LUCO PACIALO ALSO STATED DUTIES AND LIABILITIES OF AN AUDITOR. IN FIFTEENTH CENTURY IT WAS COMMON TO CALL ON AUDITORS TO ENSURE ABSENSE OF FRAUD IN THE RECORDS KEPT BY STEWARDS OF ESTATES DOMAINS AND MANORS.IN THOSE DAYS WHENEVER MONARCH (MERCHANT) SUSPECTED ERRORS OR FRAUD IN THERE ACCOUNTS, SUITABLE PERSON WERE APPOINTED TO CHECK THE ACCOUNTS.THESE PERSONS USED TO HEAR THE ARGUMENTS OF THOSE WHO KEPT TH ACCOUNTS AND EVIDENCE OF THOSE INVOLED IN THE BARTER TRANSACTIONS.THIS IS THE BASIS OF NOMENCLATURE OF THE WORD AUDIT.IT IS DERIVED FROM LATIN WORD “AUDIRE” THAT MEANS TO HEAR.

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