re performed and also brought along some difficulties. A Brief History of Early AuditingAuditing has existed since the beginning of human society. Auditing was used mostly for the detection of fraud and was done through extensive detailed examination from ancient times until the late nineteenth century (Lee, 1988). Fraud was a great concern during the early history of auditing, because internal controls were not used or not used effectively until the twentieth century. The late nineteenth century was a turning point in auditing history, when laws like the English Companies Act of 1862 were enacted. “The English Companies Act of 1862 was a general acceptance of the need for an independent review of accounts for both large and small enterprises (Lee, 1988).” This Act of 1862 showed that there was a great demand for specialized-trained professionals to perform these reviews reliably and independently. The text by William Jackson, In the True Form of Debtor and Creditor, written in 1823 discussed the need for an orderly and standardized system of accounting. Accurate reporting and the prevention of fraud would result through the use of an orderly and standardized system of accounting.Early U.S. Auditing in the Late 1800’s to Early 1900’sAuditing of the late nineteenth century involved a complete review of transactions and the preparation of the corrected accounts and financial statements (Lee, 1988). This was obviously an inefficient and expensive way to perform an audit. England and the United States saw the need to make an audit more efficient and less expensive. Around 1895, the technique of sampling emerged. “With the rapid growth of American business following the Spanish-American war, the increase in size of many enterprises and the auditing of larger concerns, there developed the necessity for making the audit one of selected tests of the accounts rather than an endeavor to examine all of the transacti...
