The development of trade and commerce between medieval Italian cities and the east, which

fostered the sailing ships "joint venture" accounts to end the venture at the completion of the
voyage. Thus, responsibility for this function fell on the shoulder of the bookkeeper and the
lawyer. These events were further evolved by the growth of partnership and credit trade and
commerce. During the 1500s the practice of outside verification spread to the rapidly developing
limited liability companies (LLC) who were responsible for outside investors.
In a parallel development, English manorial auditing began during the medieval period when
records of large manors (farms) were reviewed annually by auditors who represented the lord
and the council. This became the foundation of the British statutory audit in the 19 th century and
later spread throughout Europe.

It is, however, the Industrial Revolution (1900) that the accentuated the need for the verification
of appropriate allocation of labor wages and proper determination of profits to assess what is to
be partaken by labour, government and owner.
This was the period where government regulation of business taxation and banking regulation of
business, and development in economic theory come to influence thoughts on business, costs,
and finance requiring more appropriate determination and evaluation of net income, and
valuation of balance sheet.