Fundamentals of Auditing

Chapter 1

Nature of Auditing

1.1 INTRODUCTION

The development of modern accountancy and the growth of auditing profession in India, and, indeed, in the world as a whole, must be seen in the context of the enormous expansion of industry and commerce which has taken place since the Industrial Revolution. While business enterprises were comparatively small, and were managed by their proprietors, there was little need for the development of complex accounting procedures. When the scale of operations increased and capital was invested in joint stock companies by shareholders who took no part in the management of such companies, it becomes necessary for the managers to present accounts to the shareholders at regular intervals by means of annual accounts. ...