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 Assembly 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 expiration of their terms. In the private sector, managers of estates conducted audits of the accounts. Public finance in the Roman 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 between 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 surviving accounting records and references to audits of English-speaking countries are those of the Exchequers of England and Scotland, which date back to 1130. There are references to auditors and auditing in the 13th century in both England and Italy, and a French work on estate management written in the same century recommends an annual audit of the accounts. The City of London was audited at least as early as the 1200s, and in the early 14th century, auditors were among the elected officials. From that time on, there is extensive evidence that the value of audits was widely recognized and that the accounts of municipalities, private landholdings, and craft guilds were audited regularly (Sullivan, Gnospelius, Defliese, & Jaenicke, 1985, p. 10).
The early audits in Great Britain were of two types. Audits of cities and towns were held publicly before the governing officials and citizens and consisted of the auditors' hearing the accounts read by the treasurer; similarly, audits of guilds were heard before the membership. The practice of "heari...