Interesting facts about Internal Auditing
• The double-entry bookkeeping system invented in the 13th century provided the means for those engaged in commerce to control transactions with suppliers and customers, and check the work of employees (i.e. - the first internal controls.)
• Historical records suggest that internal auditors were being utilized prior to the 15th century. These auditors, employed by kings or merchants, were charged with detecting or preventing theft, fraud, and other improprieties. Control techniques such as separation of duties, independent verification, and questioning (i.e. - auditing) to detect and prevent irregularities are thought to have originated during that time. Thus, control assessment and fraud detection have become known as the roots of internal auditing.
• As industry and commerce evolved, so did control methods and audit techniques. These methods migrated to the United States from England during the industrial revolution. Managerial control through auditing continued to gain favor up to and through the 20th century.
• In 1941, The Institute of Internal Auditors (IIA) was founded in New York City, USA, by a small group of practicing internal auditors. The group recognized that they had many commonalities in the way they worked despite the fact that they worked in different businesses and industries.
• The internal audit profession evolved steadily with the progress of management science after World War II. Much of the theory underlying internal auditing is derived from management consulting and public accounting professions. With the implementation of the U.S. Sarbanes- Oxley Act of 2002, the profession‘s growth accelerated as internal auditing became more visible, more respected, and more valued.