The development of auditing can be divided into two stages: early audit and modern audit.
- Early Audit: In the middle Ages, the first professional auditors were appointed to examine the accounts of merchants and trade associations. With the development of commerce and industry, the role of auditors expanded to include the examination of the accounts of banks, insurance companies, and other financial institutions.
- Modern Audit: The modern audit is a systematic, independent, and objective examination of an organization’s financial, operational, and compliance records and activities. The modern audit is governed by professional auditing standards and is subject to regulation and oversight by professional bodies and government agencies.