Discussant's Response to
Internal Auditing—A Historical Perspective and Future Directions
Lawrence B. Sawyer
Consultant—Education and Management
Vic Brink's recollections of internal auditing past reach back to the beginning
of a discipline which I like to think of as management-oriented internal auditing. He was there. He was in attendance when it crawled out of the cocoon of financial ticking and totting and first spread its wings. The discipline may have had its origin in the ancient verification of financial transactions. But it started to mature when Vic and a few others brought forth The Institute of Internal Auditors.
Vic's comments on those beginnings need no discussion. No one knows them better than he. And since we feel the same about internal auditing—what it is and what it should be—I have no quarrel with his concepts. Yet in seeking to put so much on the canvas, he had to omit some of the details. This commentary,
therefore, will seek to amplify several of those details and fill in some of the gaps, particularly:
• The early history of internal auditing
• The definition of internal auditing
• Internal auditing as a unique discipline
• The internal auditor's responsibility to management and the board
• The internal auditor and the external auditor.
The Early History of Internal Auditing
Vic began his historical perspective with the birth of The Institute of Internal Auditors. It would be useful, however, to go back further—to the very beginnings.
Auditing as an aid to management control has its roots in antiquity. In the Mesopotamian civilization, about 3000 B.C., scribes prepared summaries of lists of transactions. These were then checked against the original lists prepared by others. Evidence of such checking, unearthed by archaeologists, shows tiny dots, ticks, and circles on the sides of figures. Apparently this was the beginning of two control devices: division of duties and systematic checking.1
Similar provisions appear in early Egyptian, Persian, and Hebrew records. The Egyptians required the audit of one official's records by another and the actual witnessing of corn brought to warehouses, along with certification of receipt.