It is traditional to think of an audit in terms of the annual checking of a company or
business accounts. The financial compliance audit evolved in the twentieth century as
business practices became more complex (Arter, 2000). Often the undertaking of a
financial audit will provide an increase in confidence that the company’s business is
being conducted in an honest and appropriate manner. This enhancement of credibility
was picked-up by the quality profession in 1940s (Arter, 2000) and first applied to the
military and then, in 1960s, the nuclear power industry. The implementation of a
quality inspection regime by the military was a reaction to accidental explosions of
munitions in factories (Seddon, 2000). Indeed, the recent history of auditing has often
been heavily influenced by adverse events (Cangemi and Singleton, 2003).